Case Study Description of Monterrey Manufacturing Co.
A small manufacturing company plans and budgets sales and expenses to ensure that its strategy is feasible. It must trace costs of manufacturing through work-in-process to finished goods and cost of goods sold, and project cash flows and income.
Swot Analysis of "Monterrey Manufacturing Co." written by William J. Bruns Jr. includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Manufacturing Monterrey facing as an external strategic factors. Some of the topics covered in Monterrey Manufacturing Co. case study are - Strategic Management Strategies, Budgeting, Manufacturing, Sales, Strategic planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Monterrey Manufacturing Co. casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, geopolitical disruptions, wage bills are increasing,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Monterrey Manufacturing Co.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Monterrey Manufacturing Co. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Manufacturing Monterrey, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Manufacturing Monterrey 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 Monterrey Manufacturing Co. can be done for the following purposes –
1. Strategic planning using facts provided in Monterrey Manufacturing Co. case study
2. Improving business portfolio management of Manufacturing Monterrey
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Manufacturing Monterrey
Strengths Monterrey Manufacturing Co. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Manufacturing Monterrey in Monterrey Manufacturing Co. Harvard Business Review case study are -
Organizational Resilience of Manufacturing Monterrey
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Manufacturing Monterrey does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Manufacturing Monterrey 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 Manufacturing Monterrey in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Manufacturing Monterrey 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 William J. Bruns Jr. 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.
Diverse revenue streams
– Manufacturing Monterrey is present in almost all the verticals within the industry. This has provided firm in Monterrey Manufacturing Co. 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Monterrey Manufacturing Co. firm has clearly differentiated products in the market place. This has enabled Manufacturing Monterrey to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Manufacturing Monterrey to invest into research and development (R&D) and innovation.
High brand equity
– Manufacturing Monterrey has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Manufacturing Monterrey to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Manufacturing Monterrey digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Manufacturing Monterrey 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.
High switching costs
– The high switching costs that Manufacturing Monterrey 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.
Training and development
– Manufacturing Monterrey has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Monterrey Manufacturing Co. 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.
Effective Research and Development (R&D)
– Manufacturing Monterrey 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 Monterrey Manufacturing Co. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Manufacturing Monterrey 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 Monterrey Manufacturing Co. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Manufacturing Monterrey 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 Manufacturing Monterrey is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Monterrey Manufacturing Co. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Monterrey Manufacturing Co. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Monterrey Manufacturing Co. are -
Low market penetration in new markets
– Outside its home market of Manufacturing Monterrey, firm in the HBR case study Monterrey Manufacturing Co. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Manufacturing Monterrey 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.
High cash cycle compare to competitors
Manufacturing Monterrey 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.
Need for greater diversity
– Manufacturing Monterrey 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.
Aligning sales with marketing
– It come across in the case study Monterrey Manufacturing Co. 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 Monterrey Manufacturing Co. can leverage the sales team experience to cultivate customer relationships as Manufacturing Monterrey is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Manufacturing Monterrey is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Manufacturing Monterrey needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Manufacturing Monterrey to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Manufacturing Monterrey has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Manufacturing Monterrey 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 - Monterrey Manufacturing Co. should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Manufacturing Monterrey products
– To increase the profitability and margins on the products, Manufacturing Monterrey needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Manufacturing Monterrey is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Monterrey Manufacturing Co. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Monterrey Manufacturing Co., it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Monterrey Manufacturing Co. | 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 Monterrey Manufacturing Co. are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Manufacturing Monterrey 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 Manufacturing Monterrey to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Manufacturing Monterrey can use these opportunities to build new business models that can help the communities that Manufacturing Monterrey operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Creating value in data economy
– The success of analytics program of Manufacturing Monterrey has opened avenues for new revenue streams for the organization in the industry. This can help Manufacturing Monterrey to build a more holistic ecosystem as suggested in the Monterrey Manufacturing Co. case study. Manufacturing Monterrey can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Manufacturing Monterrey 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.
Building a culture of innovation
– managers at Manufacturing Monterrey 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 Finance & Accounting segment.
Manufacturing automation
– Manufacturing Monterrey can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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. Manufacturing Monterrey can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Manufacturing Monterrey in the consumer business. Now Manufacturing Monterrey can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Manufacturing Monterrey can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Manufacturing Monterrey can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Monterrey Manufacturing Co. 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.
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 Manufacturing Monterrey 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Manufacturing Monterrey in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Manufacturing Monterrey 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 Monterrey Manufacturing Co. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Manufacturing Monterrey to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Monterrey Manufacturing Co. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Monterrey Manufacturing Co. are -
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Manufacturing Monterrey can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Manufacturing Monterrey has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Manufacturing Monterrey needs to keep up with the evolution of technology in the Finance & Accounting 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Monterrey Manufacturing Co., Manufacturing Monterrey may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
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 Manufacturing Monterrey business can come under increasing regulations regarding data privacy, data security, etc.
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. Manufacturing Monterrey needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Manufacturing Monterrey in the Finance & Accounting industry. The Finance & Accounting 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.
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 Manufacturing Monterrey.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Manufacturing Monterrey 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. Manufacturing Monterrey 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.
Consumer confidence and its impact on Manufacturing Monterrey 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.
Shortening product life cycle
– it is one of the major threat that Manufacturing Monterrey is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Monterrey Manufacturing Co. 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 Monterrey Manufacturing Co. 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 Monterrey Manufacturing Co. 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 Monterrey Manufacturing Co. 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 Monterrey Manufacturing Co. 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 Manufacturing Monterrey needs to make to build a sustainable competitive advantage.