Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing
With cost advantages from manufacturing in Asia and Mexico steadily deteriorating, U.S. firms are reassessing the option of domestic outsourcing to remain globally competitive. The challenge in evaluating international versus domestic outsourcing strategic options lies in that first-movers are extremely and intentionally vague about how they reach their decisions. The purpose of this article is to reveal these reasons by providing statistical and firm-based evidence on five major factors that are influencing the decision regarding where U.S. companies should manufacture to optimize their gross profits. The factors include (1) increasingly competitive U.S. labor costs; (2) increasing productivity of the U.S. workforce; (3) increasingly competitive domestic production costs; (4) incentives from federal, state, and local governments; and (5) improved synchronization of production with other business functions.
Swot Analysis of "Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing" written by John A. Pearce II includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Domestic Outsourcing facing as an external strategic factors. Some of the topics covered in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing casestudy better are - – technology disruption, geopolitical disruptions, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing transportation and logistics costs,
there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Domestic Outsourcing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Domestic Outsourcing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing can be done for the following purposes –
1. Strategic planning using facts provided in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing case study
2. Improving business portfolio management of Domestic Outsourcing
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 Domestic Outsourcing
Strengths Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Domestic Outsourcing in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing Harvard Business Review case study are -
Organizational Resilience of Domestic Outsourcing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Domestic Outsourcing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Domestic Outsourcing 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 John A. Pearce II 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.
Learning organization
- Domestic Outsourcing 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 Domestic Outsourcing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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.
Successful track record of launching new products
– Domestic Outsourcing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Domestic Outsourcing 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.
Superior customer experience
– The customer experience strategy of Domestic Outsourcing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Domestic Outsourcing 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 Domestic Outsourcing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Domestic Outsourcing is present in almost all the verticals within the industry. This has provided firm in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Leadership & Managing People industry
– Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing firm has clearly differentiated products in the market place. This has enabled Domestic Outsourcing to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Domestic Outsourcing to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Domestic Outsourcing in the sector have low bargaining power. Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Domestic Outsourcing to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Domestic Outsourcing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Domestic Outsourcing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Domestic Outsourcing 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.
Weaknesses Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing are -
Aligning sales with marketing
– It come across in the case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing can leverage the sales team experience to cultivate customer relationships as Domestic Outsourcing is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Domestic Outsourcing 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Domestic Outsourcing is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Domestic Outsourcing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Domestic Outsourcing to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Domestic Outsourcing, firm in the HBR case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Domestic Outsourcing 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.
Skills based hiring
– The stress on hiring functional specialists at Domestic Outsourcing 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Domestic Outsourcing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 bargaining power of channel partners
– Because of the regulatory requirements, John A. Pearce II suggests that, Domestic Outsourcing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing, is just above the industry average. Domestic Outsourcing 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.
Capital Spending Reduction
– Even during the low interest decade, Domestic Outsourcing 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.
Opportunities Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing | 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Domestic Outsourcing is facing challenges because of the dominance of functional experts in the organization. Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Domestic Outsourcing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Domestic Outsourcing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Domestic Outsourcing 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.
Developing new processes and practices
– Domestic Outsourcing 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.
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 Domestic Outsourcing in the consumer business. Now Domestic Outsourcing can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Domestic Outsourcing has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Domestic Outsourcing 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 Domestic Outsourcing to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Domestic Outsourcing 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.
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 Domestic Outsourcing 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.
Using analytics as competitive advantage
– Domestic Outsourcing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Domestic Outsourcing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Domestic Outsourcing can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Domestic Outsourcing can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Domestic Outsourcing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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.
Threats Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing are -
Increasing wage structure of Domestic Outsourcing
– 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 Domestic Outsourcing.
Stagnating economy with rate increase
– Domestic Outsourcing can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Domestic Outsourcing 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.
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.
Regulatory challenges
– Domestic Outsourcing 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.
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 Domestic Outsourcing in the Leadership & Managing People sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Domestic Outsourcing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Domestic Outsourcing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Domestic Outsourcing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Domestic Outsourcing 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.
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. Domestic Outsourcing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Domestic Outsourcing needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Domestic Outsourcing is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing 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 Domestic Outsourcing needs to make to build a sustainable competitive advantage.