Case Study Description of Volkswagen Navarra, 8th Collective Agreement (D)
Supplement case for IES332.The union leaders managed to prevent the application of the labor reform recently approved by the Spanish government, while the management of Volkswagen (VW) was able to maintain good relations with the unions and keep peace with employees by designing an agreement that assured a promising future for the plant and its employees.On October 23, at 3 a.m., the referendum on the preliminary agreement for the 8th Collective Agreement for the VW plant in Navarra was concluded, obtaining 10% more support than the previous agreement.
Authors :: Guido Stein Martinez, Carlos Escobar, Marta Cuadrado, Jose Ramon Pin Arboledas
Swot Analysis of "Volkswagen Navarra, 8th Collective Agreement (D)" 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 Agreement Navarra facing as an external strategic factors. Some of the topics covered in Volkswagen Navarra, 8th Collective Agreement (D) 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 (D) casestudy better are - – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, geopolitical disruptions, there is increasing trade war between United States & China, wage bills are increasing,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Volkswagen Navarra, 8th Collective Agreement (D)
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 (D) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agreement Navarra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agreement Navarra 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 (D) can be done for the following purposes –
1. Strategic planning using facts provided in Volkswagen Navarra, 8th Collective Agreement (D) case study
2. Improving business portfolio management of Agreement Navarra
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 Agreement Navarra
Strengths Volkswagen Navarra, 8th Collective Agreement (D) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agreement Navarra in Volkswagen Navarra, 8th Collective Agreement (D) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Agreement Navarra in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Agreement Navarra is one of the leading recruiters in the industry. Managers in the Volkswagen Navarra, 8th Collective Agreement (D) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Agreement Navarra 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 (D) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Agreement Navarra 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.
Training and development
– Agreement Navarra 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 (D) 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.
High brand equity
– Agreement Navarra has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agreement Navarra to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Agreement Navarra 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 Agreement Navarra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Volkswagen Navarra, 8th Collective Agreement (D) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Agreement Navarra 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.
Ability to lead change in Leadership & Managing People field
– Agreement Navarra 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 Agreement Navarra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Agreement Navarra is present in almost all the verticals within the industry. This has provided firm in Volkswagen Navarra, 8th Collective Agreement (D) 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Agreement Navarra digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Agreement Navarra 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.
Innovation driven organization
– Agreement Navarra is one of the most innovative firm in sector. Manager in Volkswagen Navarra, 8th Collective Agreement (D) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Volkswagen Navarra, 8th Collective Agreement (D) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Volkswagen Navarra, 8th Collective Agreement (D) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Volkswagen Navarra, 8th Collective Agreement (D), is just above the industry average. Agreement Navarra 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.
Lack of clear differentiation of Agreement Navarra products
– To increase the profitability and margins on the products, Agreement Navarra needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Volkswagen Navarra, 8th Collective Agreement (D), in the dynamic environment Agreement Navarra has struggled to respond to the nimble upstart competition. Agreement Navarra has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Agreement Navarra is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Agreement Navarra needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Agreement Navarra to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Agreement Navarra, firm in the HBR case study Volkswagen Navarra, 8th Collective Agreement (D) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Volkswagen Navarra, 8th Collective Agreement (D), it seems that the employees of Agreement Navarra 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.
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 Agreement Navarra supply chain. Even after few cautionary changes mentioned in the HBR case study - Volkswagen Navarra, 8th Collective Agreement (D), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Agreement Navarra vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Volkswagen Navarra, 8th Collective Agreement (D) 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 Agreement Navarra 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Agreement Navarra 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 (D) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Volkswagen Navarra, 8th Collective Agreement (D) 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 Agreement Navarra has relatively successful track record of launching new products.
High cash cycle compare to competitors
Agreement Navarra 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.
Opportunities Volkswagen Navarra, 8th Collective Agreement (D) | 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 (D) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Agreement Navarra is facing challenges because of the dominance of functional experts in the organization. Volkswagen Navarra, 8th Collective Agreement (D) 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.
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. Agreement Navarra can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Agreement Navarra can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agreement Navarra can use these opportunities to build new business models that can help the communities that Agreement Navarra operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Agreement Navarra to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Agreement Navarra 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.
Using analytics as competitive advantage
– Agreement Navarra 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 (D) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agreement Navarra to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Agreement Navarra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Agreement Navarra 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 Agreement Navarra to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Agreement Navarra 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Agreement Navarra can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Agreement Navarra 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.
Manufacturing automation
– Agreement Navarra 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.
Threats Volkswagen Navarra, 8th Collective Agreement (D) 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 (D) are -
Regulatory challenges
– Agreement Navarra 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.
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 Agreement Navarra business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Agreement Navarra is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Agreement Navarra in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Agreement Navarra 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 (D) .
Increasing wage structure of Agreement Navarra
– 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 Agreement Navarra.
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 (D), Agreement Navarra 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 .
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 Agreement Navarra.
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.
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. Agreement Navarra needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Agreement Navarra 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. Agreement Navarra can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
High dependence on third party suppliers
– Agreement Navarra 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.
Technology acceleration in Forth Industrial Revolution
– Agreement Navarra has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Agreement Navarra 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.
Weighted SWOT Analysis of Volkswagen Navarra, 8th Collective Agreement (D) 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 (D) 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 (D) 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 (D) 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 (D) 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 Agreement Navarra needs to make to build a sustainable competitive advantage.