Case Study Description of Godrej Agrovet Ltd (GAVL)
Nadir Godrej Chairman and B Yadav MD, Godrej Agrovet Ltd ( GAVL) grapple with the challenge of growing their cattle feed business - should they integrate vertically despite the challenges ofthe dairy industry, and risk the profitability of the current business ? The ban on cow slaughter in India adds to the dilemma.
Authors :: Jose B. Alvarez, Anjali Raina, Rachna Chawla
Swot Analysis of "Godrej Agrovet Ltd (GAVL)" written by Jose B. Alvarez, Anjali Raina, Rachna Chawla includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Godrej Agrovet facing as an external strategic factors. Some of the topics covered in Godrej Agrovet Ltd (GAVL) case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Godrej Agrovet Ltd (GAVL) casestudy better are - – geopolitical disruptions, supply chains are disrupted by pandemic , increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Godrej Agrovet Ltd (GAVL)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Godrej Agrovet Ltd (GAVL) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Godrej Agrovet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Godrej Agrovet 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 Godrej Agrovet Ltd (GAVL) can be done for the following purposes –
1. Strategic planning using facts provided in Godrej Agrovet Ltd (GAVL) case study
2. Improving business portfolio management of Godrej Agrovet
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Godrej Agrovet
Strengths Godrej Agrovet Ltd (GAVL) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Godrej Agrovet in Godrej Agrovet Ltd (GAVL) Harvard Business Review case study are -
Diverse revenue streams
– Godrej Agrovet is present in almost all the verticals within the industry. This has provided firm in Godrej Agrovet Ltd (GAVL) 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.
Ability to recruit top talent
– Godrej Agrovet is one of the leading recruiters in the industry. Managers in the Godrej Agrovet Ltd (GAVL) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Godrej Agrovet 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.
Effective Research and Development (R&D)
– Godrej Agrovet 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 Godrej Agrovet Ltd (GAVL) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Godrej Agrovet digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Godrej Agrovet 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.
Analytics focus
– Godrej Agrovet 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 Jose B. Alvarez, Anjali Raina, Rachna Chawla 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.
Superior customer experience
– The customer experience strategy of Godrej Agrovet in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Godrej Agrovet 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 Godrej Agrovet is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Godrej Agrovet Ltd (GAVL) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Sales & Marketing field
– Godrej Agrovet 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 Godrej Agrovet in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Godrej Agrovet in the sector have low bargaining power. Godrej Agrovet Ltd (GAVL) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Godrej Agrovet to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Godrej Agrovet has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Godrej Agrovet Ltd (GAVL) 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.
High brand equity
– Godrej Agrovet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Godrej Agrovet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Godrej Agrovet Ltd (GAVL) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Godrej Agrovet Ltd (GAVL) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Godrej Agrovet Ltd (GAVL), in the dynamic environment Godrej Agrovet has struggled to respond to the nimble upstart competition. Godrej Agrovet has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Godrej Agrovet supply chain. Even after few cautionary changes mentioned in the HBR case study - Godrej Agrovet Ltd (GAVL), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Godrej Agrovet vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Godrej Agrovet, firm in the HBR case study Godrej Agrovet Ltd (GAVL) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Godrej Agrovet 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Godrej Agrovet 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.
Increasing silos among functional specialists
– The organizational structure of Godrej Agrovet is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Godrej Agrovet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Godrej Agrovet to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Godrej Agrovet 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Godrej Agrovet Ltd (GAVL), is just above the industry average. Godrej Agrovet 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.
Aligning sales with marketing
– It come across in the case study Godrej Agrovet Ltd (GAVL) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Godrej Agrovet Ltd (GAVL) can leverage the sales team experience to cultivate customer relationships as Godrej Agrovet is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Godrej Agrovet Ltd (GAVL), it seems that the employees of Godrej Agrovet 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.
Skills based hiring
– The stress on hiring functional specialists at Godrej Agrovet 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.
Opportunities Godrej Agrovet Ltd (GAVL) | 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 Godrej Agrovet Ltd (GAVL) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Godrej Agrovet can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Godrej Agrovet to increase its market reach. Godrej Agrovet 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.
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 Godrej Agrovet 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.
Building a culture of innovation
– managers at Godrej Agrovet 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 Sales & Marketing segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Godrej Agrovet can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Godrej Agrovet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Godrej Agrovet 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.
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. Godrej Agrovet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Godrej Agrovet 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, Godrej Agrovet Ltd (GAVL), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Godrej Agrovet 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. Godrej Agrovet 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.
Buying journey improvements
– Godrej Agrovet can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Godrej Agrovet Ltd (GAVL) 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Godrej Agrovet in the consumer business. Now Godrej Agrovet can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Godrej Agrovet 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 Godrej Agrovet Ltd (GAVL) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Godrej Agrovet to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Godrej Agrovet Ltd (GAVL) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Godrej Agrovet Ltd (GAVL) are -
Consumer confidence and its impact on Godrej Agrovet 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Godrej Agrovet in the Sales & Marketing industry. The Sales & Marketing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Godrej Agrovet Ltd (GAVL), Godrej Agrovet may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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 Godrej Agrovet business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Godrej Agrovet 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.
Regulatory challenges
– Godrej Agrovet 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 Sales & Marketing industry regulations.
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 Godrej Agrovet in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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
– Godrej Agrovet has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Godrej Agrovet needs to keep up with the evolution of technology in the Sales & Marketing 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 Godrej Agrovet.
Environmental challenges
– Godrej Agrovet 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. Godrej Agrovet can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Godrej Agrovet 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 Godrej Agrovet Ltd (GAVL) .
Weighted SWOT Analysis of Godrej Agrovet Ltd (GAVL) 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 Godrej Agrovet Ltd (GAVL) 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 Godrej Agrovet Ltd (GAVL) 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 Godrej Agrovet Ltd (GAVL) 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 Godrej Agrovet Ltd (GAVL) 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 Godrej Agrovet needs to make to build a sustainable competitive advantage.
