Disruption in Detroit: Ford, Silicon Valley, and Beyond SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Disruption in Detroit: Ford, Silicon Valley, and Beyond
This case focuses on the Ford Motor Company in Spring 2016 and how its current CEO, Mark Fields, and his senior management team should best respond to several emerging disruptive technologies that will ultimately force the automaker to modify its current business model. These disruptive technologies includes electric vehicles, connectivity autonomous vehicles, car ownership and use, and emergence of subcompact cars. Having experienced a successful financial turnaround under the leadership of its prior CEO, Alan Mulally, during and after the 2008-09 recession, Ford must now decide whether its current investment in responding to these new emerging technologies is too much, too little or just right. As Ford considers the degree of its response, it also faces new competitors in the fast-changing automotive landscape -- besides its traditional automaker rivals like General Motors, Toyota and Hyundai -- that now includes the Google, Apple and Tesla from the Silicon Valley as well as BYD and LeEco from China. Ford's history of innovation in response to past opportunities and challenges during its history is also discussed.
Swot Analysis of "Disruption in Detroit: Ford, Silicon Valley, and Beyond" written by Ernest Gundling includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ford Automaker facing as an external strategic factors. Some of the topics covered in Disruption in Detroit: Ford, Silicon Valley, and Beyond case study are - Strategic Management Strategies, Change management, Disruptive innovation, Leadership, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Disruption in Detroit: Ford, Silicon Valley, and Beyond casestudy better are - – increasing commodity prices, increasing energy prices, geopolitical disruptions, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Disruption in Detroit: Ford, Silicon Valley, and Beyond
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Disruption in Detroit: Ford, Silicon Valley, and Beyond case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ford Automaker, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ford Automaker 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond can be done for the following purposes –
1. Strategic planning using facts provided in Disruption in Detroit: Ford, Silicon Valley, and Beyond case study
2. Improving business portfolio management of Ford Automaker
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 Ford Automaker
Strengths Disruption in Detroit: Ford, Silicon Valley, and Beyond | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ford Automaker in Disruption in Detroit: Ford, Silicon Valley, and Beyond Harvard Business Review case study are -
Successful track record of launching new products
– Ford Automaker has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ford Automaker 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.
Innovation driven organization
– Ford Automaker is one of the most innovative firm in sector. Manager in Disruption in Detroit: Ford, Silicon Valley, and Beyond Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Ford Automaker 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 Ford Automaker 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 Ford Automaker in the sector have low bargaining power. Disruption in Detroit: Ford, Silicon Valley, and Beyond has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ford Automaker to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Ford Automaker has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ford Automaker to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Ford Automaker in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Ford Automaker 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Disruption in Detroit: Ford, Silicon Valley, and Beyond firm has clearly differentiated products in the market place. This has enabled Ford Automaker to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ford Automaker to invest into research and development (R&D) and innovation.
Organizational Resilience of Ford Automaker
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ford Automaker does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Ford Automaker is one of the leading recruiters in the industry. Managers in the Disruption in Detroit: Ford, Silicon Valley, and Beyond are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Ford Automaker is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Ford Automaker 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Disruption in Detroit: Ford, Silicon Valley, and Beyond | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Disruption in Detroit: Ford, Silicon Valley, and Beyond are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ford Automaker is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 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 Ford Automaker supply chain. Even after few cautionary changes mentioned in the HBR case study - Disruption in Detroit: Ford, Silicon Valley, and Beyond, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ford Automaker vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Ford Automaker 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 bargaining power of channel partners
– Because of the regulatory requirements, Ernest Gundling suggests that, Ford Automaker 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.
Slow decision making process
– As mentioned earlier in the report, Ford Automaker 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. Ford Automaker 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 operating costs
– Compare to the competitors, firm in the HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 Ford Automaker 's lucrative customers.
Slow to strategic competitive environment developments
– As Disruption in Detroit: Ford, Silicon Valley, and Beyond HBR case study mentions - Ford Automaker takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Ford Automaker 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.
Need for greater diversity
– Ford Automaker 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond, it seems that the employees of Ford Automaker 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.
Low market penetration in new markets
– Outside its home market of Ford Automaker, firm in the HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Disruption in Detroit: Ford, Silicon Valley, and Beyond | 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond are -
Creating value in data economy
– The success of analytics program of Ford Automaker has opened avenues for new revenue streams for the organization in the industry. This can help Ford Automaker to build a more holistic ecosystem as suggested in the Disruption in Detroit: Ford, Silicon Valley, and Beyond case study. Ford Automaker can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ford Automaker 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
– Ford Automaker 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.
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. Ford Automaker 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, Ford Automaker can use these opportunities to build new business models that can help the communities that Ford Automaker operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Ford Automaker can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Disruption in Detroit: Ford, Silicon Valley, and Beyond 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ford Automaker can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ford Automaker 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.
Better consumer reach
– The expansion of the 5G network will help Ford Automaker to increase its market reach. Ford Automaker 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.
Leveraging digital technologies
– Ford Automaker 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.
Manufacturing automation
– Ford Automaker 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.
Building a culture of innovation
– managers at Ford Automaker can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Learning at scale
– Online learning technologies has now opened space for Ford Automaker 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.
Threats Disruption in Detroit: Ford, Silicon Valley, and Beyond External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Disruption in Detroit: Ford, Silicon Valley, and Beyond are -
Consumer confidence and its impact on Ford Automaker 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.
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. Ford Automaker needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ford Automaker 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
– Ford Automaker 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.
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. Ford Automaker can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Ford Automaker is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Ford Automaker 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. Ford Automaker can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Ford Automaker.
Technology acceleration in Forth Industrial Revolution
– Ford Automaker has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ford Automaker 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.
Increasing wage structure of Ford Automaker
– 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 Ford Automaker.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ford Automaker 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond .
Weighted SWOT Analysis of Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 Disruption in Detroit: Ford, Silicon Valley, and Beyond 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 Ford Automaker needs to make to build a sustainable competitive advantage.