Case Study Description of Strategic Outsourcing at Bharti Airtel Ltd.
Faced with exponential growth and a competitive telecom environment, Bharti looks for ways to better manage its capital expenditures for telecommunications and information technology. One option is to hand over management of its telecom and IT networks to its vendors. Explores the pros and cons of such an outsourcing arrangement for a company in an industry where technological superiority is considered an essential element in competitive strategy.
Authors :: F. Asis Martinez-Jerez, V.G. Narayanan, Michele Jurgens
Swot Analysis of "Strategic Outsourcing at Bharti Airtel Ltd." written by F. Asis Martinez-Jerez, V.G. Narayanan, Michele Jurgens includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bharti Outsourcing facing as an external strategic factors. Some of the topics covered in Strategic Outsourcing at Bharti Airtel Ltd. case study are - Strategic Management Strategies, Costs, Customers, Globalization, IT, Operations management, Performance measurement and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategic Outsourcing at Bharti Airtel Ltd. casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, technology disruption, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, there is backlash against globalization,
increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Strategic Outsourcing at Bharti Airtel Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategic Outsourcing at Bharti Airtel Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bharti Outsourcing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bharti Outsourcing 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 Strategic Outsourcing at Bharti Airtel Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in Strategic Outsourcing at Bharti Airtel Ltd. case study
2. Improving business portfolio management of Bharti Outsourcing
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 Bharti Outsourcing
Strengths Strategic Outsourcing at Bharti Airtel Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bharti Outsourcing in Strategic Outsourcing at Bharti Airtel Ltd. Harvard Business Review case study are -
Innovation driven organization
– Bharti Outsourcing is one of the most innovative firm in sector. Manager in Strategic Outsourcing at Bharti Airtel Ltd. 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 Bharti Outsourcing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Bharti Outsourcing 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 Strategic Outsourcing at Bharti Airtel Ltd. 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 Bharti Outsourcing 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.
Training and development
– Bharti Outsourcing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategic Outsourcing at Bharti Airtel Ltd. 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.
Organizational Resilience of Bharti Outsourcing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bharti Outsourcing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Bharti Outsourcing 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 Bharti Outsourcing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategic Outsourcing at Bharti Airtel Ltd. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Bharti Outsourcing is one of the leading recruiters in the industry. Managers in the Strategic Outsourcing at Bharti Airtel Ltd. 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
– Bharti Outsourcing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bharti Outsourcing 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.
High brand equity
– Bharti Outsourcing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bharti Outsourcing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Strategic Outsourcing at Bharti Airtel Ltd. Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Bharti Outsourcing 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 Strategic Outsourcing at Bharti Airtel Ltd. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Strategic Outsourcing at Bharti Airtel Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategic Outsourcing at Bharti Airtel Ltd. are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Strategic Outsourcing at Bharti Airtel Ltd., is just above the industry average. Bharti Outsourcing 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bharti Outsourcing 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.
Capital Spending Reduction
– Even during the low interest decade, Bharti Outsourcing 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategic Outsourcing at Bharti Airtel Ltd. 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 Bharti Outsourcing has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bharti Outsourcing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Strategic Outsourcing at Bharti Airtel Ltd. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Strategic Outsourcing at Bharti Airtel Ltd. 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 Strategic Outsourcing at Bharti Airtel Ltd. can leverage the sales team experience to cultivate customer relationships as Bharti Outsourcing is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategic Outsourcing at Bharti Airtel Ltd., it seems that the employees of Bharti Outsourcing don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Bharti Outsourcing 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. Bharti Outsourcing 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 Bharti Outsourcing 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 - Strategic Outsourcing at Bharti Airtel Ltd. should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Bharti Outsourcing is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bharti Outsourcing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bharti Outsourcing to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Bharti Outsourcing products
– To increase the profitability and margins on the products, Bharti Outsourcing needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Strategic Outsourcing at Bharti Airtel Ltd. | 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 Strategic Outsourcing at Bharti Airtel Ltd. are -
Loyalty marketing
– Bharti Outsourcing 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.
Creating value in data economy
– The success of analytics program of Bharti Outsourcing has opened avenues for new revenue streams for the organization in the industry. This can help Bharti Outsourcing to build a more holistic ecosystem as suggested in the Strategic Outsourcing at Bharti Airtel Ltd. case study. Bharti Outsourcing 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 Bharti Outsourcing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bharti Outsourcing 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. Bharti Outsourcing 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. Bharti Outsourcing 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.
Buying journey improvements
– Bharti Outsourcing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategic Outsourcing at Bharti Airtel Ltd. 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bharti Outsourcing 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.
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. Bharti Outsourcing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bharti Outsourcing 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, Strategic Outsourcing at Bharti Airtel Ltd., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Bharti Outsourcing to increase its market reach. Bharti Outsourcing 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.
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 Bharti Outsourcing in the consumer business. Now Bharti Outsourcing can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Bharti Outsourcing 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.
Developing new processes and practices
– Bharti Outsourcing 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.
Threats Strategic Outsourcing at Bharti Airtel Ltd. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategic Outsourcing at Bharti Airtel Ltd. are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bharti Outsourcing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bharti Outsourcing 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 Strategic Outsourcing at Bharti Airtel Ltd. .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bharti Outsourcing 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.
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 Bharti Outsourcing in the Strategy & Execution sector and impact the bottomline of the organization.
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 Bharti Outsourcing.
Environmental challenges
– Bharti Outsourcing 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. Bharti Outsourcing can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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. Bharti Outsourcing needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Bharti Outsourcing
– 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 Bharti Outsourcing.
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. Bharti Outsourcing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Bharti Outsourcing 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.
Technology acceleration in Forth Industrial Revolution
– Bharti Outsourcing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bharti Outsourcing 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.
High dependence on third party suppliers
– Bharti Outsourcing 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 Strategic Outsourcing at Bharti Airtel Ltd. 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 Strategic Outsourcing at Bharti Airtel Ltd. 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 Strategic Outsourcing at Bharti Airtel Ltd. 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 Strategic Outsourcing at Bharti Airtel Ltd. 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 Strategic Outsourcing at Bharti Airtel Ltd. 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 Bharti Outsourcing needs to make to build a sustainable competitive advantage.
