Maquiladoras in the 21st Century: Six Strategies for Success SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Maquiladoras in the 21st Century: Six Strategies for Success
The maquiladora industry was conceived as a win-win strategic economic platform for foreign companies and Mexican workers. The primary benefactor has been U.S. companies, which became more cost efficient by employing highly productive, lower-cost Mexican workers. However, the direct link between the U.S. economy and the corresponding employment of Mexican workers has resulted in unpredictable growth-retrenchment cycles. While the globalization of trade has grown dramatically, the maquiladoras have been slow to adapt to new trade realities, including the rise of China as a global manufacturing power. The more intense global competition and the recent financial crisis have challenged Mexico's structural deficiencies and the maquiladora model with its focus on low-cost labor. Can the maquiladoras remain viable in this seemingly unpredictable economic environment? In this article, we provide a brief history of the maquiladoras, discuss the new external trade environment realities, and offer six strategies that can transform the maquiladoras into a sustainable economic model well into the future.
Authors :: John Hardjimarcou, Lance E. Brouthers, McNicol P. Jason, Donald E. Michie
Swot Analysis of "Maquiladoras in the 21st Century: Six Strategies for Success" written by John Hardjimarcou, Lance E. Brouthers, McNicol P. Jason, Donald E. Michie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Maquiladoras Maquiladora facing as an external strategic factors. Some of the topics covered in Maquiladoras in the 21st Century: Six Strategies for Success case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Maquiladoras in the 21st Century: Six Strategies for Success casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, wage bills are increasing, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Maquiladoras in the 21st Century: Six Strategies for Success
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Maquiladoras in the 21st Century: Six Strategies for Success case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maquiladoras Maquiladora, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maquiladoras Maquiladora 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 Maquiladoras in the 21st Century: Six Strategies for Success can be done for the following purposes –
1. Strategic planning using facts provided in Maquiladoras in the 21st Century: Six Strategies for Success case study
2. Improving business portfolio management of Maquiladoras Maquiladora
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 Maquiladoras Maquiladora
Strengths Maquiladoras in the 21st Century: Six Strategies for Success | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maquiladoras Maquiladora in Maquiladoras in the 21st Century: Six Strategies for Success Harvard Business Review case study are -
Training and development
– Maquiladoras Maquiladora has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Maquiladoras in the 21st Century: Six Strategies for Success 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.
Cross disciplinary teams
– Horizontal connected teams at the Maquiladoras Maquiladora 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.
Innovation driven organization
– Maquiladoras Maquiladora is one of the most innovative firm in sector. Manager in Maquiladoras in the 21st Century: Six Strategies for Success Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Maquiladoras Maquiladora is one of the leading recruiters in the industry. Managers in the Maquiladoras in the 21st Century: Six Strategies for Success 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
– Maquiladoras Maquiladora 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 Maquiladoras in the 21st Century: Six Strategies for Success HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Maquiladoras Maquiladora in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Maquiladoras Maquiladora 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 Maquiladoras Maquiladora is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Maquiladoras in the 21st Century: Six Strategies for Success Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Leadership & Managing People industry
– Maquiladoras in the 21st Century: Six Strategies for Success firm has clearly differentiated products in the market place. This has enabled Maquiladoras Maquiladora to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Maquiladoras Maquiladora to invest into research and development (R&D) and innovation.
Ability to lead change in Leadership & Managing People field
– Maquiladoras Maquiladora 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 Maquiladoras Maquiladora in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Maquiladoras Maquiladora 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 Hardjimarcou, Lance E. Brouthers, McNicol P. Jason, Donald E. Michie 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.
Organizational Resilience of Maquiladoras Maquiladora
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Maquiladoras Maquiladora does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Maquiladoras Maquiladora 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.
Weaknesses Maquiladoras in the 21st Century: Six Strategies for Success | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Maquiladoras in the 21st Century: Six Strategies for Success are -
Products dominated business model
– Even though Maquiladoras Maquiladora 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 - Maquiladoras in the 21st Century: Six Strategies for Success should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Maquiladoras in the 21st Century: Six Strategies for Success 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 Maquiladoras Maquiladora 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Maquiladoras Maquiladora is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Maquiladoras Maquiladora needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Maquiladoras Maquiladora to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Maquiladoras in the 21st Century: Six Strategies for Success, 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.
Slow to strategic competitive environment developments
– As Maquiladoras in the 21st Century: Six Strategies for Success HBR case study mentions - Maquiladoras Maquiladora 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.
Capital Spending Reduction
– Even during the low interest decade, Maquiladoras Maquiladora 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Maquiladoras in the 21st Century: Six Strategies for Success, is just above the industry average. Maquiladoras Maquiladora 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.
Skills based hiring
– The stress on hiring functional specialists at Maquiladoras Maquiladora 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
– Maquiladoras Maquiladora 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.
High cash cycle compare to competitors
Maquiladoras Maquiladora 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.
Slow decision making process
– As mentioned earlier in the report, Maquiladoras Maquiladora 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. Maquiladoras Maquiladora 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.
Opportunities Maquiladoras in the 21st Century: Six Strategies for Success | 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 Maquiladoras in the 21st Century: Six Strategies for Success are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Maquiladoras Maquiladora can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Maquiladoras Maquiladora 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.
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. Maquiladoras Maquiladora can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Maquiladoras Maquiladora to increase its market reach. Maquiladoras Maquiladora 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.
Manufacturing automation
– Maquiladoras Maquiladora 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Maquiladoras Maquiladora can use these opportunities to build new business models that can help the communities that Maquiladoras Maquiladora operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Maquiladoras Maquiladora can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Maquiladoras in the 21st Century: Six Strategies for Success 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.
Building a culture of innovation
– managers at Maquiladoras Maquiladora 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.
Leveraging digital technologies
– Maquiladoras Maquiladora 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Maquiladoras Maquiladora 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 Maquiladoras Maquiladora to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Maquiladoras Maquiladora 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.
Loyalty marketing
– Maquiladoras Maquiladora 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.
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. Maquiladoras Maquiladora can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Maquiladoras in the 21st Century: Six Strategies for Success External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Maquiladoras in the 21st Century: Six Strategies for Success are -
Consumer confidence and its impact on Maquiladoras Maquiladora 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, Maquiladoras Maquiladora 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 Maquiladoras in the 21st Century: Six Strategies for Success .
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.
Technology acceleration in Forth Industrial Revolution
– Maquiladoras Maquiladora has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Maquiladoras Maquiladora 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.
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. Maquiladoras Maquiladora needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Maquiladoras Maquiladora 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 Maquiladoras Maquiladora 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
– Maquiladoras Maquiladora 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.
Regulatory challenges
– Maquiladoras Maquiladora 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.
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 Maquiladoras Maquiladora business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Maquiladoras Maquiladora is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Maquiladoras Maquiladora can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Maquiladoras Maquiladora
– 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 Maquiladoras Maquiladora.
Weighted SWOT Analysis of Maquiladoras in the 21st Century: Six Strategies for Success 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 Maquiladoras in the 21st Century: Six Strategies for Success 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 Maquiladoras in the 21st Century: Six Strategies for Success 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 Maquiladoras in the 21st Century: Six Strategies for Success 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 Maquiladoras in the 21st Century: Six Strategies for Success 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 Maquiladoras Maquiladora needs to make to build a sustainable competitive advantage.
