Growth of Bannari Amman Group - A Family-owned Enterprise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
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 - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing commodity prices, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, 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 -
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.
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.
Learning organization
- Units Bag 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 Units Bag is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Growth of Bannari Amman Group - A Family-owned Enterprise Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Highly skilled collaborators
– Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Strong track record of project management
– Units Bag is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Units Bag is present in almost all the verticals within the industry. This has provided firm in Growth of Bannari Amman Group - A Family-owned Enterprise case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Strategy & Execution field
– Units Bag 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 Units Bag in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Units Bag supply chain. Even after few cautionary changes mentioned in the HBR case study - Growth of Bannari Amman Group - A Family-owned Enterprise, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Units Bag vulnerable to further global disruptions in South East Asia.
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.
Slow to strategic competitive environment developments
– As Growth of Bannari Amman Group - A Family-owned Enterprise HBR case study mentions - Units Bag 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Growth of Bannari Amman Group - A Family-owned Enterprise, in the dynamic environment Units Bag has struggled to respond to the nimble upstart competition. Units Bag has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Growth of Bannari Amman Group - A Family-owned Enterprise, 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 decision making process
– As mentioned earlier in the report, Units Bag 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. Units Bag 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 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.
Low market penetration in new markets
– Outside its home market of Units Bag, firm in the HBR case study Growth of Bannari Amman Group - A Family-owned Enterprise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Units Bag is facing challenges because of the dominance of functional experts in the organization. Growth of Bannari Amman Group - A Family-owned Enterprise 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.
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.
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.
Leveraging digital technologies
– Units Bag 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.
Manufacturing automation
– Units Bag can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Units Bag can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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.
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 Units Bag 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.
Creating value in data economy
– The success of analytics program of Units Bag has opened avenues for new revenue streams for the organization in the industry. This can help Units Bag to build a more holistic ecosystem as suggested in the Growth of Bannari Amman Group - A Family-owned Enterprise case study. Units Bag can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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 -
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.
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.
Technology acceleration in Forth Industrial Revolution
– Units Bag has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Units Bag 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.
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.
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.
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.
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.
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.
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 .
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 Units Bag in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Units Bag 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 Growth of Bannari Amman Group - A Family-owned Enterprise .
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.