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 - – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is backlash against globalization,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, 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.
Effective Research and Development (R&D)
– Domestic Outsourcing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Ability to recruit top talent
– Domestic Outsourcing is one of the leading recruiters in the industry. Managers in the Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Domestic Outsourcing 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 Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Domestic Outsourcing is one of the most innovative firm in sector. Manager in Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Domestic Outsourcing 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.
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.
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 -
Lack of clear differentiation of Domestic Outsourcing products
– To increase the profitability and margins on the products, Domestic Outsourcing needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing, in the dynamic environment Domestic Outsourcing has struggled to respond to the nimble upstart competition. Domestic Outsourcing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing, it seems that the employees of Domestic Outsourcing 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 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.
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.
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 Domestic Outsourcing supply chain. Even after few cautionary changes mentioned in the HBR case study - Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Domestic Outsourcing vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Domestic Outsourcing 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 - Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Domestic Outsourcing 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 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 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.
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 -
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. Domestic Outsourcing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Domestic Outsourcing 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.
Manufacturing automation
– Domestic Outsourcing 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.
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.
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.
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.
Leveraging digital technologies
– Domestic Outsourcing 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.
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.
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.
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.
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.
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 -
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Why Domestic Outsourcing is Leading America's Reemergence in Global Manufacturing, Domestic Outsourcing 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 .
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.
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.
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.
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.
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 Domestic Outsourcing business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Domestic Outsourcing 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. Domestic Outsourcing can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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.
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.