Murugappa Group: Centuries-Old Business Heritage and Tradition SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Murugappa Group: Centuries-Old Business Heritage and Tradition
A successful five-generation family business group in India separates its ownership role from its operational management role to meet the needs of a more global economy. This includes hiring professional nonfamily business unit managers as well as including nonfamily directors on the corporate board.
Swot Analysis of "Murugappa Group: Centuries-Old Business Heritage and Tradition" written by John L. Ward, Carol Adler Zsolnay includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nonfamily Murugappa facing as an external strategic factors. Some of the topics covered in Murugappa Group: Centuries-Old Business Heritage and Tradition case study are - Strategic Management Strategies, International business, Leadership development, Succession planning and Organizational Development.
Some of the macro environment factors that can be used to understand the Murugappa Group: Centuries-Old Business Heritage and Tradition casestudy better are - – challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , wage bills are increasing, increasing energy prices, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
Introduction to SWOT Analysis of Murugappa Group: Centuries-Old Business Heritage and Tradition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Murugappa Group: Centuries-Old Business Heritage and Tradition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nonfamily Murugappa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nonfamily Murugappa 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 Murugappa Group: Centuries-Old Business Heritage and Tradition can be done for the following purposes –
1. Strategic planning using facts provided in Murugappa Group: Centuries-Old Business Heritage and Tradition case study
2. Improving business portfolio management of Nonfamily Murugappa
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nonfamily Murugappa
Strengths Murugappa Group: Centuries-Old Business Heritage and Tradition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nonfamily Murugappa in Murugappa Group: Centuries-Old Business Heritage and Tradition Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Nonfamily Murugappa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Nonfamily Murugappa is one of the most innovative firm in sector. Manager in Murugappa Group: Centuries-Old Business Heritage and Tradition Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Organizational Development industry
– Murugappa Group: Centuries-Old Business Heritage and Tradition firm has clearly differentiated products in the market place. This has enabled Nonfamily Murugappa to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Nonfamily Murugappa to invest into research and development (R&D) and innovation.
Analytics focus
– Nonfamily Murugappa 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 L. Ward, Carol Adler Zsolnay 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.
High switching costs
– The high switching costs that Nonfamily Murugappa 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.
High brand equity
– Nonfamily Murugappa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nonfamily Murugappa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Nonfamily Murugappa 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 Murugappa Group: Centuries-Old Business Heritage and Tradition - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Nonfamily Murugappa is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Nonfamily Murugappa 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.
Successful track record of launching new products
– Nonfamily Murugappa has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nonfamily Murugappa 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.
Training and development
– Nonfamily Murugappa has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Murugappa Group: Centuries-Old Business Heritage and Tradition 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.
Learning organization
- Nonfamily Murugappa 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 Nonfamily Murugappa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Murugappa Group: Centuries-Old Business Heritage and Tradition Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Murugappa Group: Centuries-Old Business Heritage and Tradition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Murugappa Group: Centuries-Old Business Heritage and Tradition are -
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 Nonfamily Murugappa supply chain. Even after few cautionary changes mentioned in the HBR case study - Murugappa Group: Centuries-Old Business Heritage and Tradition, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nonfamily Murugappa vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Nonfamily Murugappa, firm in the HBR case study Murugappa Group: Centuries-Old Business Heritage and Tradition needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Murugappa Group: Centuries-Old Business Heritage and Tradition, it seems that the employees of Nonfamily Murugappa 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 operating costs
– Compare to the competitors, firm in the HBR case study Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Nonfamily Murugappa 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Murugappa Group: Centuries-Old Business Heritage and Tradition, in the dynamic environment Nonfamily Murugappa has struggled to respond to the nimble upstart competition. Nonfamily Murugappa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Murugappa Group: Centuries-Old Business Heritage and Tradition HBR case study mentions - Nonfamily Murugappa 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Nonfamily Murugappa has relatively successful track record of launching new products.
Need for greater diversity
– Nonfamily Murugappa 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.
Increasing silos among functional specialists
– The organizational structure of Nonfamily Murugappa is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Nonfamily Murugappa needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nonfamily Murugappa to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Nonfamily Murugappa 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.
No frontier risks strategy
– After analyzing the HBR case study Murugappa Group: Centuries-Old Business Heritage and Tradition, it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
Opportunities Murugappa Group: Centuries-Old Business Heritage and Tradition | 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 Murugappa Group: Centuries-Old Business Heritage and Tradition are -
Learning at scale
– Online learning technologies has now opened space for Nonfamily Murugappa 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.
Leveraging digital technologies
– Nonfamily Murugappa 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
– Nonfamily Murugappa 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nonfamily Murugappa in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development 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, Nonfamily Murugappa can use these opportunities to build new business models that can help the communities that Nonfamily Murugappa operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nonfamily Murugappa 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. Nonfamily Murugappa 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.
Using analytics as competitive advantage
– Nonfamily Murugappa 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 Murugappa Group: Centuries-Old Business Heritage and Tradition - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nonfamily Murugappa to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nonfamily Murugappa 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 Nonfamily Murugappa to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Nonfamily Murugappa can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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. Nonfamily Murugappa can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Nonfamily Murugappa 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.
Creating value in data economy
– The success of analytics program of Nonfamily Murugappa has opened avenues for new revenue streams for the organization in the industry. This can help Nonfamily Murugappa to build a more holistic ecosystem as suggested in the Murugappa Group: Centuries-Old Business Heritage and Tradition case study. Nonfamily Murugappa 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 Nonfamily Murugappa 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 Organizational Development segment.
Threats Murugappa Group: Centuries-Old Business Heritage and Tradition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Murugappa Group: Centuries-Old Business Heritage and Tradition are -
Regulatory challenges
– Nonfamily Murugappa 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 Organizational Development industry regulations.
Stagnating economy with rate increase
– Nonfamily Murugappa 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. Nonfamily Murugappa needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nonfamily Murugappa can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Shortening product life cycle
– it is one of the major threat that Nonfamily Murugappa is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Nonfamily Murugappa has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Nonfamily Murugappa needs to keep up with the evolution of technology in the Organizational Development 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.
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 Nonfamily Murugappa.
Consumer confidence and its impact on Nonfamily Murugappa 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.
Environmental challenges
– Nonfamily Murugappa 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. Nonfamily Murugappa can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nonfamily Murugappa with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Nonfamily Murugappa in the Organizational Development sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Murugappa Group: Centuries-Old Business Heritage and Tradition, Nonfamily Murugappa may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Weighted SWOT Analysis of Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Murugappa Group: Centuries-Old Business Heritage and Tradition 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 Nonfamily Murugappa needs to make to build a sustainable competitive advantage.
