Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top
General Motors (GM) and Toyota competed in the global automobile industry for many decades. While GM hung on to the Number 1 position longer than any other automaker, it lost this position to Toyota in 2008. It took Toyota 71 years to beat GM but only 2 years for GM to regain the top spot in 2011. Through a brief analysis of the history of these two rivals, I explain why GM and Toyota demonstrated different ways of falling from the Number 1 spot. I argue that the reason for the reversal of leadership positions for these two automakers can be understood by examining executive hubris and the way it either facilitated path dependence or promoted a departure from an established path for the perpetuation of market leadership. I then demonstrate how GM and Toyota acted contrastingly with respect to path dependence and how their CEOs injected hubris almost the same way in their decisions to hold on to the top position. Contrary to the longstanding myth, I also demonstrate that it was hubris--as opposed to humility--that characterized executive leadership in Toyota in its last 15 years. Recommendations for practicing or budding executives of large corporations are given.
Swot Analysis of "Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top" written by Shamsud Chowdhury includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gm Toyota facing as an external strategic factors. Some of the topics covered in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top case study are - Strategic Management Strategies, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top casestudy better are - – technology disruption, increasing commodity prices, there is backlash against globalization, wage bills are increasing, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gm Toyota, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gm Toyota 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top can be done for the following purposes –
1. Strategic planning using facts provided in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top case study
2. Improving business portfolio management of Gm Toyota
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 Gm Toyota
Strengths Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gm Toyota in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top Harvard Business Review case study are -
Ability to recruit top talent
– Gm Toyota is one of the leading recruiters in the industry. Managers in the Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Gm Toyota has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Gm Toyota digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gm Toyota 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.
Learning organization
- Gm Toyota 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 Gm Toyota is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Gm Toyota 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 Shamsud Chowdhury 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.
Low bargaining power of suppliers
– Suppliers of Gm Toyota in the sector have low bargaining power. Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gm Toyota to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Gm Toyota is one of the most innovative firm in sector. Manager in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Gm Toyota 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top firm has clearly differentiated products in the market place. This has enabled Gm Toyota to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Gm Toyota to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Gm Toyota is present in almost all the verticals within the industry. This has provided firm in Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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.
Superior customer experience
– The customer experience strategy of Gm Toyota in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Gm Toyota 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.
Weaknesses Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top are -
Slow decision making process
– As mentioned earlier in the report, Gm Toyota 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. Gm Toyota 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top, it seems that the employees of Gm Toyota 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.
Products dominated business model
– Even though Gm Toyota 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 - Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Gm Toyota 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.
Interest costs
– Compare to the competition, Gm Toyota has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Shamsud Chowdhury suggests that, Gm Toyota 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gm Toyota 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gm Toyota is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top, in the dynamic environment Gm Toyota has struggled to respond to the nimble upstart competition. Gm Toyota has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Gm Toyota has relatively successful track record of launching new products.
Opportunities Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top | 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gm Toyota 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.
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 Gm Toyota 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gm Toyota 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 Gm Toyota to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gm Toyota is facing challenges because of the dominance of functional experts in the organization. Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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.
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. Gm Toyota 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. Gm Toyota 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.
Creating value in data economy
– The success of analytics program of Gm Toyota has opened avenues for new revenue streams for the organization in the industry. This can help Gm Toyota to build a more holistic ecosystem as suggested in the Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top case study. Gm Toyota can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Gm Toyota 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gm Toyota can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Gm Toyota 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.
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. Gm Toyota 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 Gm Toyota to increase its market reach. Gm Toyota 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.
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. Gm Toyota 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, Gm Toyota can use these opportunities to build new business models that can help the communities that Gm Toyota operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top, Gm Toyota 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 .
Environmental challenges
– Gm Toyota 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. Gm Toyota can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gm Toyota with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Gm Toyota has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Gm Toyota 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.
Regulatory challenges
– Gm Toyota 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.
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 Gm Toyota.
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 Gm Toyota business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gm Toyota 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.
Stagnating economy with rate increase
– Gm Toyota 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.
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. Gm Toyota 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 Gm Toyota is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gm Toyota 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top .
High dependence on third party suppliers
– Gm Toyota 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.
Weighted SWOT Analysis of Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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 Strategic Roads That Diverge or Converge: GM and Toyota in the Battle for the Top 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 Gm Toyota needs to make to build a sustainable competitive advantage.