Case Study Description of Mahindra Aerospace: Looking Ahead
Hemant Luthra, Chairman and Arvind Mehra, Executive Director and CEO, Mahindra Aerospace needed to examine the prospects of the aerospace industry in India and decide on the organization's growth strategy. Mahindra Aerospace was a leader among private sector organizations in India that, in addition to building capacity outside the country, had established manufacturing capacity in India for the aerospace industry. The top executives needed to take stock of how the situation had evolved since its entry into the industry to decide on the next major strategic moves. Luthra and Mehra had to decide the next major strategic moves for the company. The Mahindra Group had already established some relevant capabilities, and Mahindra Aerospace added some focused capabilities by acquisitions, and was well-poised to participate in engineering design, and also be a supplier to some majors. With strong technological capabilities relative to other new players and a relative cost advantage over traditional American and/or European players, Mahindra hoped to be able to chart a strategy that allowed them to move up the value chain. However, the top executives were sensitive to the unique features of the sector - long gestation periods for product development and production and high volatility in the market. Hence, prudent capital investment decisions were very critical for the long-term health of the organization.
Swot Analysis of "Mahindra Aerospace: Looking Ahead" written by Abhoy Ojha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mahindra Aerospace facing as an external strategic factors. Some of the topics covered in Mahindra Aerospace: Looking Ahead case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Mahindra Aerospace: Looking Ahead casestudy better are - – increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, wage bills are increasing, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Mahindra Aerospace: Looking Ahead
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mahindra Aerospace: Looking Ahead case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mahindra Aerospace, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mahindra Aerospace 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 Mahindra Aerospace: Looking Ahead can be done for the following purposes –
1. Strategic planning using facts provided in Mahindra Aerospace: Looking Ahead case study
2. Improving business portfolio management of Mahindra Aerospace
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 Mahindra Aerospace
Strengths Mahindra Aerospace: Looking Ahead | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mahindra Aerospace in Mahindra Aerospace: Looking Ahead Harvard Business Review case study are -
High brand equity
– Mahindra Aerospace has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mahindra Aerospace to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Mahindra Aerospace
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mahindra Aerospace does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Mahindra Aerospace digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mahindra Aerospace 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.
Ability to lead change in Leadership & Managing People field
– Mahindra Aerospace 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 Mahindra Aerospace in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Mahindra Aerospace in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Mahindra Aerospace is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Mahindra Aerospace 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 Mahindra Aerospace is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mahindra Aerospace: Looking Ahead Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Mahindra Aerospace 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 Mahindra Aerospace: Looking Ahead HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Mahindra Aerospace has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mahindra Aerospace: Looking Ahead 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.
Low bargaining power of suppliers
– Suppliers of Mahindra Aerospace in the sector have low bargaining power. Mahindra Aerospace: Looking Ahead has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mahindra Aerospace to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Mahindra Aerospace is one of the most innovative firm in sector. Manager in Mahindra Aerospace: Looking Ahead Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Mahindra Aerospace: Looking Ahead 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.
Weaknesses Mahindra Aerospace: Looking Ahead | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mahindra Aerospace: Looking Ahead are -
Low market penetration in new markets
– Outside its home market of Mahindra Aerospace, firm in the HBR case study Mahindra Aerospace: Looking Ahead needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Mahindra Aerospace 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mahindra Aerospace: Looking Ahead, it seems that the employees of Mahindra Aerospace 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.
High cash cycle compare to competitors
Mahindra Aerospace 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.
Increasing silos among functional specialists
– The organizational structure of Mahindra Aerospace is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Mahindra Aerospace needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mahindra Aerospace to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Mahindra Aerospace: Looking Ahead, 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.
Products dominated business model
– Even though Mahindra Aerospace 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 - Mahindra Aerospace: Looking Ahead should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mahindra Aerospace: Looking Ahead, is just above the industry average. Mahindra Aerospace 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.
Lack of clear differentiation of Mahindra Aerospace products
– To increase the profitability and margins on the products, Mahindra Aerospace needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mahindra Aerospace is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mahindra Aerospace: Looking Ahead 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace has relatively successful track record of launching new products.
Opportunities Mahindra Aerospace: Looking Ahead | 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 Mahindra Aerospace: Looking Ahead are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mahindra Aerospace 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 Mahindra Aerospace 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. Mahindra Aerospace can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mahindra Aerospace 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mahindra Aerospace can use these opportunities to build new business models that can help the communities that Mahindra Aerospace operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Mahindra Aerospace 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mahindra Aerospace is facing challenges because of the dominance of functional experts in the organization. Mahindra Aerospace: Looking Ahead 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.
Manufacturing automation
– Mahindra Aerospace 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mahindra Aerospace can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Mahindra Aerospace: Looking Ahead, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Mahindra Aerospace can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace 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
– Mahindra Aerospace 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.
Using analytics as competitive advantage
– Mahindra Aerospace 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 Mahindra Aerospace: Looking Ahead - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mahindra Aerospace to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Mahindra Aerospace 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.
Threats Mahindra Aerospace: Looking Ahead External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mahindra Aerospace: Looking Ahead are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mahindra Aerospace with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Mahindra Aerospace 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mahindra Aerospace 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 Mahindra Aerospace: Looking Ahead .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mahindra Aerospace 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 dependence on third party suppliers
– Mahindra Aerospace 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.
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. Mahindra Aerospace needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Mahindra Aerospace 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. Mahindra Aerospace can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Mahindra Aerospace
– 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 Mahindra Aerospace.
Regulatory challenges
– Mahindra Aerospace 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.
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. Mahindra Aerospace can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mahindra Aerospace: Looking Ahead, Mahindra Aerospace 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 Mahindra Aerospace 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 Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace: Looking Ahead 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 Mahindra Aerospace needs to make to build a sustainable competitive advantage.
