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 - – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, technology disruption, increasing government debt because of Covid-19 spendings,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
Organizational Resilience of Godrej Agrovet
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Godrej Agrovet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Highly skilled collaborators
– Godrej Agrovet 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 Godrej Agrovet Ltd (GAVL) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Godrej Agrovet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Godrej Agrovet 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.
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 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.
Operational resilience
– The operational resilience strategy in the Godrej Agrovet Ltd (GAVL) 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.
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.
Strong track record of project management
– Godrej Agrovet is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Jose B. Alvarez, Anjali Raina, Rachna Chawla suggests that, Godrej Agrovet 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.
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.
Slow to strategic competitive environment developments
– As Godrej Agrovet Ltd (GAVL) HBR case study mentions - Godrej Agrovet 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.
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.
Lack of clear differentiation of Godrej Agrovet products
– To increase the profitability and margins on the products, Godrej Agrovet needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Godrej Agrovet 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.
Slow decision making process
– As mentioned earlier in the report, Godrej Agrovet 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. Godrej Agrovet 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.
Products dominated business model
– Even though Godrej Agrovet 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 - Godrej Agrovet Ltd (GAVL) should strive to include more intangible value offerings along with its core products and services.
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 operating costs
– Compare to the competitors, firm in the HBR case study Godrej Agrovet Ltd (GAVL) 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 Godrej Agrovet 's lucrative customers.
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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Godrej Agrovet can use these opportunities to build new business models that can help the communities that Godrej Agrovet operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
Creating value in data economy
– The success of analytics program of Godrej Agrovet has opened avenues for new revenue streams for the organization in the industry. This can help Godrej Agrovet to build a more holistic ecosystem as suggested in the Godrej Agrovet Ltd (GAVL) case study. Godrej Agrovet can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Loyalty marketing
– Godrej Agrovet 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Godrej Agrovet 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 Godrej Agrovet to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Godrej Agrovet in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Godrej Agrovet is facing challenges because of the dominance of functional experts in the organization. Godrej Agrovet Ltd (GAVL) 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.
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.
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.
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.
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.
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 -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Godrej Agrovet will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Godrej Agrovet can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Godrej Agrovet is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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 .
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.
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. Godrej Agrovet needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Godrej Agrovet
– 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 Godrej Agrovet.
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.