Case Study Description of Tata Chemicals Ltd.: Global Acquisitions
This case deals with the revitalization of Tata Chemicals Ltd. (TCL) by way of significant international acquisitions in the first decade of the new millennium. Set in 2011, TCL has a decision to make on the potential acquisition of a stake in a North American early stage potash development company. This acquisition could allow TCL to set up a fertilizer plant, which might give the company a jumpstart just as earlier acquisitions had helped the company to be ranked number two in the world in soda ash production. As backward integration can be a risky strategy, the acquisition needs to be carefully considered in terms of when to integrate and when to rely on market-driven contractual arrangements. Vasant Sivaraman is affiliated with S.P. Jain Institute of Management & Research.
Swot Analysis of "Tata Chemicals Ltd.: Global Acquisitions" written by Vasant Sivaraman, Varun Madan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tcl Acquisitions facing as an external strategic factors. Some of the topics covered in Tata Chemicals Ltd.: Global Acquisitions case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tata Chemicals Ltd.: Global Acquisitions casestudy better are - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is increasing trade war between United States & China, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Tata Chemicals Ltd.: Global Acquisitions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tata Chemicals Ltd.: Global Acquisitions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tcl Acquisitions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tcl Acquisitions operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tata Chemicals Ltd.: Global Acquisitions can be done for the following purposes –
1. Strategic planning using facts provided in Tata Chemicals Ltd.: Global Acquisitions case study
2. Improving business portfolio management of Tcl Acquisitions
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 Tcl Acquisitions
Strengths Tata Chemicals Ltd.: Global Acquisitions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tcl Acquisitions in Tata Chemicals Ltd.: Global Acquisitions Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Tcl Acquisitions 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 Tcl Acquisitions in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Tcl Acquisitions is one of the leading recruiters in the industry. Managers in the Tata Chemicals Ltd.: Global Acquisitions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Tcl Acquisitions has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tcl Acquisitions to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Tcl Acquisitions 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 Vasant Sivaraman, Varun Madan 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.
Cross disciplinary teams
– Horizontal connected teams at the Tcl Acquisitions 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.
Superior customer experience
– The customer experience strategy of Tcl Acquisitions in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Tcl Acquisitions has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Tcl Acquisitions has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Tata Chemicals Ltd.: Global Acquisitions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Tcl Acquisitions 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 Tata Chemicals Ltd.: Global Acquisitions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Tcl Acquisitions 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 Tcl Acquisitions is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tata Chemicals Ltd.: Global Acquisitions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Tcl Acquisitions in the sector have low bargaining power. Tata Chemicals Ltd.: Global Acquisitions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tcl Acquisitions to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Tata Chemicals Ltd.: Global Acquisitions firm has clearly differentiated products in the market place. This has enabled Tcl Acquisitions to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tcl Acquisitions to invest into research and development (R&D) and innovation.
Weaknesses Tata Chemicals Ltd.: Global Acquisitions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tata Chemicals Ltd.: Global Acquisitions are -
High bargaining power of channel partners
– Because of the regulatory requirements, Vasant Sivaraman, Varun Madan suggests that, Tcl Acquisitions 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.
No frontier risks strategy
– After analyzing the HBR case study Tata Chemicals Ltd.: Global Acquisitions, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Tata Chemicals Ltd.: Global Acquisitions HBR case study mentions - Tcl Acquisitions 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tata Chemicals Ltd.: Global Acquisitions 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 Tcl Acquisitions has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Tata Chemicals Ltd.: Global Acquisitions 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 Tcl Acquisitions 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Tata Chemicals Ltd.: Global Acquisitions 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 Tata Chemicals Ltd.: Global Acquisitions can leverage the sales team experience to cultivate customer relationships as Tcl Acquisitions is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Tcl Acquisitions, firm in the HBR case study Tata Chemicals Ltd.: Global Acquisitions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tata Chemicals Ltd.: Global Acquisitions, it seems that the employees of Tcl Acquisitions 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.
Lack of clear differentiation of Tcl Acquisitions products
– To increase the profitability and margins on the products, Tcl Acquisitions needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Tcl Acquisitions 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tata Chemicals Ltd.: Global Acquisitions, is just above the industry average. Tcl Acquisitions 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.
Opportunities Tata Chemicals Ltd.: Global Acquisitions | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Tata Chemicals Ltd.: Global Acquisitions are -
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 Tcl Acquisitions 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tcl Acquisitions is facing challenges because of the dominance of functional experts in the organization. Tata Chemicals Ltd.: Global Acquisitions 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tcl Acquisitions 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.
Buying journey improvements
– Tcl Acquisitions can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tata Chemicals Ltd.: Global Acquisitions 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.
Leveraging digital technologies
– Tcl Acquisitions 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Tcl Acquisitions can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Tcl Acquisitions 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.
Developing new processes and practices
– Tcl Acquisitions 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tcl Acquisitions can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Tcl Acquisitions in the consumer business. Now Tcl Acquisitions can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Tcl Acquisitions to increase its market reach. Tcl Acquisitions 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.
Loyalty marketing
– Tcl Acquisitions 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.
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. Tcl Acquisitions can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Tata Chemicals Ltd.: Global Acquisitions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tata Chemicals Ltd.: Global Acquisitions are -
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.
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. Tcl Acquisitions 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.
Shortening product life cycle
– it is one of the major threat that Tcl Acquisitions is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tata Chemicals Ltd.: Global Acquisitions, Tcl Acquisitions 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 .
Regulatory challenges
– Tcl Acquisitions 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.
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.
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. Tcl Acquisitions needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Tcl Acquisitions
– 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 Tcl Acquisitions.
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 Tcl Acquisitions business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tcl Acquisitions 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.
Environmental challenges
– Tcl Acquisitions 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. Tcl Acquisitions can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Tcl Acquisitions 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.
High dependence on third party suppliers
– Tcl Acquisitions 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 Tata Chemicals Ltd.: Global Acquisitions Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Tata Chemicals Ltd.: Global Acquisitions needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Tata Chemicals Ltd.: Global Acquisitions is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Tata Chemicals Ltd.: Global Acquisitions is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tata Chemicals Ltd.: Global Acquisitions 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 Tcl Acquisitions needs to make to build a sustainable competitive advantage.
