Question

it should be done on electric cars

Discuss the SWOT technique with respect to at least one element each that you identified in two of the four quadrants. Explain how this knowledge could be used in the strategic planning process within your selected company

Answer 1

Defined by Taylor, “SWOT, which stands for strengths, weaknesses, opportunities and threats, is an analytical framework that can help your company face its greatest challenges and find its most promising new markets. The method was created in the 1960s by business gurus Edmund P. Learned, C. Roland Christensen, Kenneth Andrews and William D. Book in their book "Business Policy, Text and Cases". When thinking about the subprime auto industry and thinking about Credit Acceptance, I see multiple examples of each quadrant, and an ability to grow as a company if everything is taken into consideration.

A primary strength of Credit Acceptance is they accept everyone; however they are charging the customer and the dealership an excessive amount of fees with many stipulations on the deal. This is a safety net for Credit Acceptance. This is also a huge benefit for the dealership though. If they chose to work with Credit Acceptance, they know each and every deal will be bought, and that is a huge weight off of their shoulders.

                A primary weakness of Credit Acceptance is an unclear path of how money is going to be retrieved from customers that just don’t pay. They make their money by charging huge fees and high interest rates, but the fact is that some people’s credit is bad because they simply don’t pay. If Credit Acceptance has said they guarantee anybody a loan, they will absolutely encounter a majority of these people.

                According to Chan, “Compared to other players in the subprime auto industry, Credit Acceptance has higher returns on capital and demonstrated growth during industry downturns (2007-2009 and 2011-present) while competitors saw their earnings shrink or go negative. I think that it is the best managed company is a very competitive and cyclical industry.” . Obviously they are taking into consideration a SWOT analysis and are capitalizing on their strengths. As a strategic planner for the company, I would continuously look for solutions to ensure money is returned from all customers.