Montana Plastic Inc.: The Shelby Division in 2014 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Montana Plastic Inc.: The Shelby Division in 2014
In May 2014, the newly installed director of global operations for Montana Plastic's Shelby Division, a producer of plastic gasoline tanks for global automotive brands such as General Motors, Ford and Toyota, is trying to turn the division around as it is suffering waste rates of 30 per cent. At the same time, topline growth is slowing dramatically, profitability is dropping, competition from Asia-based companies is heating up and employee turnover, at 25 per cent of the workforce, is the highest it has ever been. The company, based in Helena, Montana, is underperforming after years of growth: it had seen tenfold revenue increases over the past decade. Aware that he does not have an engineering degree or any experience running manufacturing plants, the director needs to assess the situation carefully. He is plotting out what he has to do in the next few months to turn the company's fortunes around.
Swot Analysis of "Montana Plastic Inc.: The Shelby Division in 2014" written by Christopher Williams, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Montana Shelby facing as an external strategic factors. Some of the topics covered in Montana Plastic Inc.: The Shelby Division in 2014 case study are - Strategic Management Strategies, Crisis management, Human resource management, Leadership, Manufacturing, Organizational culture, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Montana Plastic Inc.: The Shelby Division in 2014 casestudy better are - – increasing transportation and logistics costs, increasing energy prices, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Montana Plastic Inc.: The Shelby Division in 2014
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Montana Plastic Inc.: The Shelby Division in 2014 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Montana Shelby, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Montana Shelby 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 Montana Plastic Inc.: The Shelby Division in 2014 can be done for the following purposes –
1. Strategic planning using facts provided in Montana Plastic Inc.: The Shelby Division in 2014 case study
2. Improving business portfolio management of Montana Shelby
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 Montana Shelby
Strengths Montana Plastic Inc.: The Shelby Division in 2014 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Montana Shelby in Montana Plastic Inc.: The Shelby Division in 2014 Harvard Business Review case study are -
Highly skilled collaborators
– Montana Shelby 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 Montana Plastic Inc.: The Shelby Division in 2014 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Montana Plastic Inc.: The Shelby Division in 2014 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.
Ability to recruit top talent
– Montana Shelby is one of the leading recruiters in the industry. Managers in the Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Shelby digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Montana Shelby 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.
Superior customer experience
– The customer experience strategy of Montana Shelby in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Montana Shelby is one of the most innovative firm in sector. Manager in Montana Plastic Inc.: The Shelby Division in 2014 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Montana Shelby 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 Montana Shelby is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Montana Plastic Inc.: The Shelby Division in 2014 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Montana Shelby has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Montana Shelby 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.
High switching costs
– The high switching costs that Montana Shelby 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.
Effective Research and Development (R&D)
– Montana Shelby 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 Montana Plastic Inc.: The Shelby Division in 2014 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Montana Shelby 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.
Ability to lead change in Leadership & Managing People field
– Montana Shelby 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 Montana Shelby in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Montana Plastic Inc.: The Shelby Division in 2014 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Montana Plastic Inc.: The Shelby Division in 2014 are -
Slow decision making process
– As mentioned earlier in the report, Montana Shelby 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. Montana Shelby 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.
Interest costs
– Compare to the competition, Montana Shelby has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher Williams, Ken Mark suggests that, Montana Shelby 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.
Skills based hiring
– The stress on hiring functional specialists at Montana Shelby 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.
Capital Spending Reduction
– Even during the low interest decade, Montana Shelby 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Shelby has relatively successful track record of launching new products.
High cash cycle compare to competitors
Montana Shelby 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.
Increasing silos among functional specialists
– The organizational structure of Montana Shelby is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Montana Shelby needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Montana Shelby to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Montana Shelby 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 - Montana Plastic Inc.: The Shelby Division in 2014 should strive to include more intangible value offerings along with its core products and services.
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 Montana Shelby supply chain. Even after few cautionary changes mentioned in the HBR case study - Montana Plastic Inc.: The Shelby Division in 2014, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Montana Shelby vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Shelby 's lucrative customers.
Opportunities Montana Plastic Inc.: The Shelby Division in 2014 | 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 Montana Plastic Inc.: The Shelby Division in 2014 are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Montana Shelby 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.
Loyalty marketing
– Montana Shelby 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.
Creating value in data economy
– The success of analytics program of Montana Shelby has opened avenues for new revenue streams for the organization in the industry. This can help Montana Shelby to build a more holistic ecosystem as suggested in the Montana Plastic Inc.: The Shelby Division in 2014 case study. Montana Shelby can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Montana Shelby 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 Montana Shelby to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Montana Shelby 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.
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 Montana Shelby 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.
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. Montana Shelby can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Montana Shelby can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Montana Shelby 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Montana Shelby can use these opportunities to build new business models that can help the communities that Montana Shelby operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Montana Shelby 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, Montana Plastic Inc.: The Shelby Division in 2014, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Montana Shelby 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.
Using analytics as competitive advantage
– Montana Shelby 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 Montana Plastic Inc.: The Shelby Division in 2014 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Montana Shelby to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Montana Plastic Inc.: The Shelby Division in 2014 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Montana Plastic Inc.: The Shelby Division in 2014 are -
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 Montana Shelby business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Montana Shelby 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 Montana Shelby 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Montana Plastic Inc.: The Shelby Division in 2014, Montana Shelby 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
– Montana Shelby needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Montana Shelby needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Montana Shelby 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Montana Shelby 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 Montana Plastic Inc.: The Shelby Division in 2014 .
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 Montana Shelby in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Montana Shelby is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Montana Shelby with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Montana Shelby 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.
Weighted SWOT Analysis of Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Plastic Inc.: The Shelby Division in 2014 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 Montana Shelby needs to make to build a sustainable competitive advantage.