Tata Chemicals Magadi: Confronting Poverty in Rural Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tata Chemicals Magadi: Confronting Poverty in Rural Africa
In the summer of 2013, the managing director of Tata Chemicals Magadi, Africa's largest soda ash manufacturer and one of the oldest and largest export earners in Kenya, was wondering how he was going to respond to a growing number of challenges. As a producer of a commodity product, the company was vulnerable to escalating energy costs, oversupply and economic cycles. Global growth had been sluggish since the 2008 economic recession and competition was intense, especially since the emergence of Chinese producers. Magadi Township, where the company's production facility was located, was one of the poorest in the country, subject to droughts and without many of the basic public services typically provided by government such as roads, health care, electricity, water and education. To address these needs, the company migrated from a top-down, paternal, ad hoc and resource-intensive approach to a bottom-up, collaborative, holistic and resource-sharing style that focused on community capacity building and self-governance. However, the issue now is how to best balance the strong need to reduce costs while remaining committed to the sustainability of the surrounding community. Michael Valente is affiliated with York University.
Swot Analysis of "Tata Chemicals Magadi: Confronting Poverty in Rural Africa" written by Michael Valente includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Magadi Tata facing as an external strategic factors. Some of the topics covered in Tata Chemicals Magadi: Confronting Poverty in Rural Africa case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tata Chemicals Magadi: Confronting Poverty in Rural Africa casestudy better are - – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of Tata Chemicals Magadi: Confronting Poverty in Rural Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tata Chemicals Magadi: Confronting Poverty in Rural Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Magadi Tata, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Magadi Tata 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa can be done for the following purposes –
1. Strategic planning using facts provided in Tata Chemicals Magadi: Confronting Poverty in Rural Africa case study
2. Improving business portfolio management of Magadi Tata
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Magadi Tata
Strengths Tata Chemicals Magadi: Confronting Poverty in Rural Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Magadi Tata in Tata Chemicals Magadi: Confronting Poverty in Rural Africa Harvard Business Review case study are -
Innovation driven organization
– Magadi Tata is one of the most innovative firm in sector. Manager in Tata Chemicals Magadi: Confronting Poverty in Rural Africa Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Magadi Tata 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 Michael Valente 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.
Organizational Resilience of Magadi Tata
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Magadi Tata does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Magadi Tata in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Magadi Tata 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.
Learning organization
- Magadi Tata 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 Magadi Tata is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tata Chemicals Magadi: Confronting Poverty in Rural Africa Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Magadi Tata has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Magadi Tata 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
– Magadi Tata has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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 switching costs
– The high switching costs that Magadi Tata 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.
Effective Research and Development (R&D)
– Magadi Tata 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Magadi Tata has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Magadi Tata to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Magadi Tata 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tata Chemicals Magadi: Confronting Poverty in Rural Africa are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa, in the dynamic environment Magadi Tata has struggled to respond to the nimble upstart competition. Magadi Tata has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Magadi Tata 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. Magadi Tata 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Magadi Tata is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Magadi Tata 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.
No frontier risks strategy
– After analyzing the HBR case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Slow to strategic competitive environment developments
– As Tata Chemicals Magadi: Confronting Poverty in Rural Africa HBR case study mentions - Magadi Tata 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.
Increasing silos among functional specialists
– The organizational structure of Magadi Tata is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Magadi Tata needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Magadi Tata to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Magadi Tata 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa, it seems that the employees of Magadi Tata 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 bargaining power of channel partners
– Because of the regulatory requirements, Michael Valente suggests that, Magadi Tata 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.
Low market penetration in new markets
– Outside its home market of Magadi Tata, firm in the HBR case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Tata Chemicals Magadi: Confronting Poverty in Rural Africa | 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Magadi Tata 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, Tata Chemicals Magadi: Confronting Poverty in Rural Africa, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Magadi Tata is facing challenges because of the dominance of functional experts in the organization. Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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.
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 Magadi Tata 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Magadi Tata can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Magadi Tata 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. Magadi Tata 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
– Magadi Tata 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Magadi Tata to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Magadi Tata has opened avenues for new revenue streams for the organization in the industry. This can help Magadi Tata to build a more holistic ecosystem as suggested in the Tata Chemicals Magadi: Confronting Poverty in Rural Africa case study. Magadi Tata can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Magadi Tata can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Magadi Tata can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Magadi Tata can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Magadi Tata 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 Magadi Tata to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Magadi Tata can develop new processes and procedures in Strategy & Execution 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.
Learning at scale
– Online learning technologies has now opened space for Magadi Tata 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa are -
Regulatory challenges
– Magadi Tata 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Magadi Tata in the Strategy & Execution industry. The Strategy & Execution 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.
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.
Environmental challenges
– Magadi Tata 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. Magadi Tata can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Magadi Tata 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.
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 Magadi Tata business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Magadi Tata 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa .
Technology acceleration in Forth Industrial Revolution
– Magadi Tata has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Magadi Tata needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Magadi Tata 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tata Chemicals Magadi: Confronting Poverty in Rural Africa, Magadi Tata may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
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 Magadi Tata in the Strategy & Execution sector and impact the bottomline of the organization.
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. Magadi Tata needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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 Tata Chemicals Magadi: Confronting Poverty in Rural Africa 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 Magadi Tata needs to make to build a sustainable competitive advantage.
