ITC e-Choupal: Corporate Social Responsibility in Rural India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of ITC e-Choupal: Corporate Social Responsibility in Rural India

Set against the backdrop of under-served, over-exploited rural India, this case highlights how the use of technology by the Indian conglomerate ITC transformed the lives of many rural Indians at the same time that it was benefiting the company. Continually plagued by an inefficient supply chain in rural agriculture, ITC implemented the e-Choupal initiative in 2000. Under the initiative, ITC set up small Internet kiosks in villages that allowed farmers access to an efficient and transparent alternative to the traditional mandi for marketing their produce. By establishing a direct channel between the farmer and ITC, e-Choupal significantly marginalized the role of middlemen, thereby ensuring farmers more money for their produce. In doing so, e-Choupal not only mitigated ITC's agrarian supply chain concerns but also achieved a greater good-the economic uplift and empowerment of the Indian farmer. Although e-Choupal was conceived as ITC's answer to their supply chain woes, ITC was quick to realize that they had discovered the delicate balance between achieving corporate profitability and making a social contribution. Aware of the multitude of challenges faced by impoverished rural Indians, ITC extended its e-Choupal framework to deliver core services, such as access to health care, education and information. They even liaised with other companies, including fast-moving consumer goods companies and finance companies, to deliver products and services to rural Indians that had previously commanded huge premiums or were simply unavailable. Evolving into a platform for community development, e-Choupal was both eradicating poverty and chipping away at rural isolation, even while ITC continued to enjoy the benefits of functional procurement and distribution value chains.

Authors :: Ali Farhoomand, Saurabh Bhatnagar

Topics :: Strategy & Execution

Tags :: Government, Operations management, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "ITC e-Choupal: Corporate Social Responsibility in Rural India" written by Ali Farhoomand, Saurabh Bhatnagar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Choupal Itc facing as an external strategic factors. Some of the topics covered in ITC e-Choupal: Corporate Social Responsibility in Rural India case study are - Strategic Management Strategies, Government, Operations management, Social enterprise, Social responsibility and Strategy & Execution.

Some of the macro environment factors that can be used to understand the ITC e-Choupal: Corporate Social Responsibility in Rural India casestudy better are - – increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc

---

---

---

---

Introduction to SWOT Analysis of ITC e-Choupal: Corporate Social Responsibility in Rural India

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ITC e-Choupal: Corporate Social Responsibility in Rural India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Choupal Itc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Choupal Itc 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 ITC e-Choupal: Corporate Social Responsibility in Rural India can be done for the following purposes –
1. Strategic planning using facts provided in ITC e-Choupal: Corporate Social Responsibility in Rural India case study
2. Improving business portfolio management of Choupal Itc
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 Choupal Itc

---

Strengths ITC e-Choupal: Corporate Social Responsibility in Rural India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Choupal Itc in ITC e-Choupal: Corporate Social Responsibility in Rural India Harvard Business Review case study are -

Cross disciplinary teams

– Horizontal connected teams at the Choupal Itc 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.

Analytics focus

– Choupal Itc 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 Ali Farhoomand, Saurabh Bhatnagar 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.

Ability to lead change in Strategy & Execution field

– Choupal Itc 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 Choupal Itc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

– Choupal Itc 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 ITC e-Choupal: Corporate Social Responsibility in Rural India HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Learning organization

- Choupal Itc 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 Choupal Itc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ITC e-Choupal: Corporate Social Responsibility in Rural India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Digital Transformation in Strategy & Execution segment

- digital transformation varies from industry to industry. For Choupal Itc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Choupal Itc 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.

High switching costs

– The high switching costs that Choupal Itc 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.

Sustainable margins compare to other players in Strategy & Execution industry

– ITC e-Choupal: Corporate Social Responsibility in Rural India firm has clearly differentiated products in the market place. This has enabled Choupal Itc to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Choupal Itc to invest into research and development (R&D) and innovation.

Ability to recruit top talent

– Choupal Itc is one of the leading recruiters in the industry. Managers in the ITC e-Choupal: Corporate Social Responsibility in Rural India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Successful track record of launching new products

– Choupal Itc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Choupal Itc 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.

Diverse revenue streams

– Choupal Itc is present in almost all the verticals within the industry. This has provided firm in ITC e-Choupal: Corporate Social Responsibility in Rural India 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.

High brand equity

– Choupal Itc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Choupal Itc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

---

---

Weaknesses ITC e-Choupal: Corporate Social Responsibility in Rural India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of ITC e-Choupal: Corporate Social Responsibility in Rural India are -

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study ITC e-Choupal: Corporate Social Responsibility in Rural India, it seems that the employees of Choupal Itc don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

High cash cycle compare to competitors

Choupal Itc 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.

Capital Spending Reduction

– Even during the low interest decade, Choupal Itc 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study ITC e-Choupal: Corporate Social Responsibility in Rural India, is just above the industry average. Choupal Itc 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.

High bargaining power of channel partners

– Because of the regulatory requirements, Ali Farhoomand, Saurabh Bhatnagar suggests that, Choupal Itc 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study ITC e-Choupal: Corporate Social Responsibility in Rural India, in the dynamic environment Choupal Itc has struggled to respond to the nimble upstart competition. Choupal Itc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring

– The stress on hiring functional specialists at Choupal Itc 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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the ITC e-Choupal: Corporate Social Responsibility in Rural India 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 Choupal Itc has relatively successful track record of launching new products.

Workers concerns about automation

– As automation is fast increasing in the segment, Choupal Itc 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.

Products dominated business model

– Even though Choupal Itc 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 - ITC e-Choupal: Corporate Social Responsibility in Rural India should strive to include more intangible value offerings along with its core products and services.

High operating costs

– Compare to the competitors, firm in the HBR case study ITC e-Choupal: Corporate Social Responsibility in Rural India 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 Choupal Itc 's lucrative customers.

---

Opportunities ITC e-Choupal: Corporate Social Responsibility in Rural India | 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 ITC e-Choupal: Corporate Social Responsibility in Rural India are -

Developing new processes and practices

– Choupal Itc 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Choupal Itc 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.

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. Choupal Itc 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. Choupal Itc 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 Choupal Itc has opened avenues for new revenue streams for the organization in the industry. This can help Choupal Itc to build a more holistic ecosystem as suggested in the ITC e-Choupal: Corporate Social Responsibility in Rural India case study. Choupal Itc can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Choupal Itc 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 Choupal Itc to hire the very best people irrespective of their geographical location.

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 Choupal Itc in the consumer business. Now Choupal Itc can target international markets with far fewer capital restrictions requirements than the existing system.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Choupal Itc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Choupal Itc 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.

Buying journey improvements

– Choupal Itc can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ITC e-Choupal: Corporate Social Responsibility in Rural India 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.

Using analytics as competitive advantage

– Choupal Itc 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 ITC e-Choupal: Corporate Social Responsibility in Rural India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Choupal Itc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Choupal Itc is facing challenges because of the dominance of functional experts in the organization. ITC e-Choupal: Corporate Social Responsibility in Rural India 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Choupal Itc in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.

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 Choupal Itc 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.

---

Threats ITC e-Choupal: Corporate Social Responsibility in Rural India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study ITC e-Choupal: Corporate Social Responsibility in Rural India are -

High dependence on third party suppliers

– Choupal Itc high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Choupal Itc needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Choupal Itc has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Choupal Itc 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.

Stagnating economy with rate increase

– Choupal Itc 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.

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.

Consumer confidence and its impact on Choupal Itc 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 Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Choupal Itc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Choupal Itc.

Regulatory challenges

– Choupal Itc 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.

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 Choupal Itc business can come under increasing regulations regarding data privacy, data security, etc.

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 Choupal Itc in the Strategy & Execution 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Choupal Itc 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 ITC e-Choupal: Corporate Social Responsibility in Rural India .

---

Weighted SWOT Analysis of ITC e-Choupal: Corporate Social Responsibility in Rural India 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 ITC e-Choupal: Corporate Social Responsibility in Rural India 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 ITC e-Choupal: Corporate Social Responsibility in Rural India 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 ITC e-Choupal: Corporate Social Responsibility in Rural India 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 ITC e-Choupal: Corporate Social Responsibility in Rural India 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 Choupal Itc needs to make to build a sustainable competitive advantage.

--- ---