Growth of Bannari Amman Group - A Family-owned Enterprise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Growth of Bannari Amman Group - A Family-owned Enterprise
Bannari Amman Group (BAG) was one of the largest industrial conglomerates in South India with manufacturing, trading, distribution and financing corporations in the group. This group had the legacy of conducting business ventures over the past 40 years. Starting as a group of related and unrelated businesses in a purely family-owned entity, now the group had three publicly listed companies and over 15 family-owned businesses in its fold. Following the tradition that the eldest in the family headed the group, the group performed under the leadership of the chairman. The chairman of BAG had a day long meeting with the unit heads of BAG on January 6, 2011 to review whether the business heads were capable of handling their units by themselves, what was the appropriate method of hand holding for the new generation of entrepreneurs and how would the unit heads act to optimize performance of their units. He observed that the business group's units emerged as independent entities, but the businesses were complementing each other to a certain extent. This was especially true for the logistics. Due to this, the group's businesses enjoyed an inherent advantage. As he looked at the challenges that the units would come across under new leadership in the forthcoming years, he was also aware of the need to develop the vision across the spectrum of units big and small, flagship companies and the smaller stragglers. The chairman looked for processes to keep the group synergies in place and identify the businesses that could be strengthened over time.
Authors :: Bala Krishnamoorthy, K. Abhinay, Ramesh Kumar
Swot Analysis of "Growth of Bannari Amman Group - A Family-owned Enterprise" written by Bala Krishnamoorthy, K. Abhinay, Ramesh Kumar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Units Bag facing as an external strategic factors. Some of the topics covered in Growth of Bannari Amman Group - A Family-owned Enterprise case study are - Strategic Management Strategies, Social responsibility and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Growth of Bannari Amman Group - A Family-owned Enterprise casestudy better are - – central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of Growth of Bannari Amman Group - A Family-owned Enterprise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Growth of Bannari Amman Group - A Family-owned Enterprise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Units Bag, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise can be done for the following purposes –
1. Strategic planning using facts provided in Growth of Bannari Amman Group - A Family-owned Enterprise case study
2. Improving business portfolio management of Units Bag
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 Units Bag
Strengths Growth of Bannari Amman Group - A Family-owned Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Units Bag in Growth of Bannari Amman Group - A Family-owned Enterprise Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Units Bag 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.
High switching costs
– The high switching costs that Units Bag 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.
Low bargaining power of suppliers
– Suppliers of Units Bag in the sector have low bargaining power. Growth of Bannari Amman Group - A Family-owned Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Units Bag to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Units Bag 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 Bala Krishnamoorthy, K. Abhinay, Ramesh Kumar 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.
Successful track record of launching new products
– Units Bag has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Units Bag 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.
Effective Research and Development (R&D)
– Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise - 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
– Units Bag has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Units Bag to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Units Bag is one of the leading recruiters in the industry. Managers in the Growth of Bannari Amman Group - A Family-owned Enterprise are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Units Bag digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Units Bag 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Growth of Bannari Amman Group - A Family-owned Enterprise firm has clearly differentiated products in the market place. This has enabled Units Bag to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Units Bag to invest into research and development (R&D) and innovation.
Innovation driven organization
– Units Bag is one of the most innovative firm in sector. Manager in Growth of Bannari Amman Group - A Family-owned Enterprise Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Units Bag in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Growth of Bannari Amman Group - A Family-owned Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Growth of Bannari Amman Group - A Family-owned Enterprise are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Growth of Bannari Amman Group - A Family-owned Enterprise, is just above the industry average. Units Bag 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.
Need for greater diversity
– Units Bag 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.
Skills based hiring
– The stress on hiring functional specialists at Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise 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 Units Bag has relatively successful track record of launching new products.
Products dominated business model
– Even though Units Bag 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 - Growth of Bannari Amman Group - A Family-owned Enterprise should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Units Bag is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Units Bag needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Units Bag to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Growth of Bannari Amman Group - A Family-owned Enterprise 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 Growth of Bannari Amman Group - A Family-owned Enterprise can leverage the sales team experience to cultivate customer relationships as Units Bag is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Growth of Bannari Amman Group - A Family-owned Enterprise 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 Units Bag 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Units Bag is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Growth of Bannari Amman Group - A Family-owned Enterprise can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Bala Krishnamoorthy, K. Abhinay, Ramesh Kumar suggests that, Units Bag 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.
Interest costs
– Compare to the competition, Units Bag has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Growth of Bannari Amman Group - A Family-owned Enterprise | 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 Growth of Bannari Amman Group - A Family-owned Enterprise are -
Better consumer reach
– The expansion of the 5G network will help Units Bag to increase its market reach. Units Bag 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Units Bag 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, Growth of Bannari Amman Group - A Family-owned Enterprise, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Units Bag to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Units Bag 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.
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 Units Bag in the consumer business. Now Units Bag can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Units Bag 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Units Bag can use these opportunities to build new business models that can help the communities that Units Bag operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Units Bag 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Units Bag can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Units Bag 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Units Bag 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 Units Bag to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Units Bag 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. Units Bag 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. Units Bag 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.
Threats Growth of Bannari Amman Group - A Family-owned Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Growth of Bannari Amman Group - A Family-owned Enterprise are -
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. Units Bag needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Units Bag can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Units Bag
– 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 Units Bag.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Units Bag 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.
Regulatory challenges
– Units Bag 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.
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. Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise, Units Bag 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 .
Stagnating economy with rate increase
– Units Bag 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.
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 Units Bag.
Shortening product life cycle
– it is one of the major threat that Units Bag is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Units Bag business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Units Bag 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.
Weighted SWOT Analysis of Growth of Bannari Amman Group - A Family-owned Enterprise 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 Growth of Bannari Amman Group - A Family-owned Enterprise 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 Growth of Bannari Amman Group - A Family-owned Enterprise 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 Growth of Bannari Amman Group - A Family-owned Enterprise 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 Growth of Bannari Amman Group - A Family-owned Enterprise 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 Units Bag needs to make to build a sustainable competitive advantage.