Creating a Corporate Advantage: The Case of the Tata Group SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Creating a Corporate Advantage: The Case of the Tata Group
"The Tata group is among the largest diversified business groups in India. The group generated about US$100 billion in revenues in 2011-12 from 90 companies operating in diverse businesses in seven broad industry categories. The case describes in detail the various mechanisms by which the Tata group attempts to create a corporate or parenting advantage. The case first highlights the important difference in the way a business group like Tata is structured when compared to a typical conglomerate in the West. The case then describes in detail the various services offered to group companies by the corporate centre, such as access to the Tata brand, quality management services, common procurement, centralized HR, legal, finance, public affairs (lobbying), training and consulting services. The case also discusses the perspective of some of the group companies. Companies often found the group affiliation and services to be of value as it provided them with lower transactional costs, less friction and better contract enforcement within the group, superior access to the political power structure and significant financial backing. With the Tata group preparing to welcome its new chairman in December 2012, the case ends with questions on the sustainability of the prevalent structure, practices, group philosophy and culture. "
Swot Analysis of "Creating a Corporate Advantage: The Case of the Tata Group" written by Raveendra Chittoor, Arohini Narain, Richa Vyas, Chetan Tolia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tata Services facing as an external strategic factors. Some of the topics covered in Creating a Corporate Advantage: The Case of the Tata Group case study are - Strategic Management Strategies, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Creating a Corporate Advantage: The Case of the Tata Group casestudy better are - – central banks are concerned over increasing inflation, geopolitical disruptions, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Creating a Corporate Advantage: The Case of the Tata Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Creating a Corporate Advantage: The Case of the Tata Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tata Services, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tata Services 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 Creating a Corporate Advantage: The Case of the Tata Group can be done for the following purposes –
1. Strategic planning using facts provided in Creating a Corporate Advantage: The Case of the Tata Group case study
2. Improving business portfolio management of Tata Services
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 Tata Services
Strengths Creating a Corporate Advantage: The Case of the Tata Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tata Services in Creating a Corporate Advantage: The Case of the Tata Group Harvard Business Review case study are -
Highly skilled collaborators
– Tata Services 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 Creating a Corporate Advantage: The Case of the Tata Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Tata Services is one of the most innovative firm in sector. Manager in Creating a Corporate Advantage: The Case of the Tata Group Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Tata Services 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 Creating a Corporate Advantage: The Case of the Tata Group - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Tata Services in the sector have low bargaining power. Creating a Corporate Advantage: The Case of the Tata Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tata Services to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Tata Services has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tata Services 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.
Cross disciplinary teams
– Horizontal connected teams at the Tata Services 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.
Organizational Resilience of Tata Services
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tata Services does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Tata Services in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Tata Services has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Creating a Corporate Advantage: The Case of the Tata Group 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.
Strong track record of project management
– Tata Services 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
– Tata Services is present in almost all the verticals within the industry. This has provided firm in Creating a Corporate Advantage: The Case of the Tata Group 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.
Operational resilience
– The operational resilience strategy in the Creating a Corporate Advantage: The Case of the Tata Group 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.
Weaknesses Creating a Corporate Advantage: The Case of the Tata Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Creating a Corporate Advantage: The Case of the Tata Group 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 Tata Services supply chain. Even after few cautionary changes mentioned in the HBR case study - Creating a Corporate Advantage: The Case of the Tata Group, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tata Services vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Creating a Corporate Advantage: The Case of the Tata Group 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 Creating a Corporate Advantage: The Case of the Tata Group can leverage the sales team experience to cultivate customer relationships as Tata Services is planning to shift buying processes online.
Products dominated business model
– Even though Tata Services 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 - Creating a Corporate Advantage: The Case of the Tata Group 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 Tata Services, firm in the HBR case study Creating a Corporate Advantage: The Case of the Tata Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Raveendra Chittoor, Arohini Narain, Richa Vyas, Chetan Tolia suggests that, Tata Services 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.
Capital Spending Reduction
– Even during the low interest decade, Tata Services 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 cash cycle compare to competitors
Tata Services 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.
Slow to strategic competitive environment developments
– As Creating a Corporate Advantage: The Case of the Tata Group HBR case study mentions - Tata Services 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tata Services is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Creating a Corporate Advantage: The Case of the Tata Group can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Tata Services 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Creating a Corporate Advantage: The Case of the Tata Group, in the dynamic environment Tata Services has struggled to respond to the nimble upstart competition. Tata Services has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Creating a Corporate Advantage: The Case of the Tata Group | 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 Creating a Corporate Advantage: The Case of the Tata Group are -
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. Tata Services can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Tata Services 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.
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 Tata Services 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.
Learning at scale
– Online learning technologies has now opened space for Tata Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tata Services 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
– Tata Services can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Creating a Corporate Advantage: The Case of the Tata Group 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.
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 Tata Services in the consumer business. Now Tata Services can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tata Services 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 Tata Services to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tata Services 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.
Creating value in data economy
– The success of analytics program of Tata Services has opened avenues for new revenue streams for the organization in the industry. This can help Tata Services to build a more holistic ecosystem as suggested in the Creating a Corporate Advantage: The Case of the Tata Group case study. Tata Services can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tata Services 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, Creating a Corporate Advantage: The Case of the Tata Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tata Services is facing challenges because of the dominance of functional experts in the organization. Creating a Corporate Advantage: The Case of the Tata Group 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.
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. Tata Services 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. Tata Services 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 Creating a Corporate Advantage: The Case of the Tata Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Creating a Corporate Advantage: The Case of the Tata Group are -
Increasing wage structure of Tata Services
– 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 Tata Services.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Creating a Corporate Advantage: The Case of the Tata Group, Tata Services 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tata Services with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Tata Services 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. Tata Services can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Tata Services 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 Tata Services is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Tata Services 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.
Consumer confidence and its impact on Tata Services 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.
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 Tata Services business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tata Services 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 Creating a Corporate Advantage: The Case of the Tata Group .
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 Tata Services in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Tata Services 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. Tata Services 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.
Weighted SWOT Analysis of Creating a Corporate Advantage: The Case of the Tata Group 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 Creating a Corporate Advantage: The Case of the Tata Group 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 Creating a Corporate Advantage: The Case of the Tata Group 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 Creating a Corporate Advantage: The Case of the Tata Group 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 Creating a Corporate Advantage: The Case of the Tata Group 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 Tata Services needs to make to build a sustainable competitive advantage.
