Leading the Tata Group (A): The Ratan Tata Years SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Leading the Tata Group (A): The Ratan Tata Years
This two-part case traces the evolution of the Tata Group, one of India's largest and well-known business groups, from inception until date. The first case principally focuses on Ratan Tata's leadership of the Tata Group, from 1991 to 2012. Tata Group History, the first section of the case, traces the early years of the Tata Group, its management philosophy, the leadership years of its legendary chairman, JRD Tata and ends with the elevation of Ratan Tata as chairman of the group in 1991. Leading Change details the group's transformation under Ratan Tata's leadership. Passing the Baton describes the succession process that led to the appointment of Cyrus Mistry as chairman of the group in late 2012. The second case describes Cyrus Mistry's leadership of the group until it ended abruptly with his sudden removal as chairman of Tata Sons on October 24, 2016, and the reinstatement of Ratan Tata as interim chairman.
Authors :: K S Manikandan, K Rajyalakshmi, J Ramachandran
Swot Analysis of "Leading the Tata Group (A): The Ratan Tata Years" written by K S Manikandan, K Rajyalakshmi, J Ramachandran includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tata Ratan facing as an external strategic factors. Some of the topics covered in Leading the Tata Group (A): The Ratan Tata Years case study are - Strategic Management Strategies, Emerging markets, Leadership and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Leading the Tata Group (A): The Ratan Tata Years casestudy better are - – geopolitical disruptions, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing transportation and logistics costs, there is backlash against globalization,
increasing energy prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Leading the Tata Group (A): The Ratan Tata Years
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leading the Tata Group (A): The Ratan Tata Years case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tata Ratan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tata Ratan 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 Leading the Tata Group (A): The Ratan Tata Years can be done for the following purposes –
1. Strategic planning using facts provided in Leading the Tata Group (A): The Ratan Tata Years case study
2. Improving business portfolio management of Tata Ratan
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 Ratan
Strengths Leading the Tata Group (A): The Ratan Tata Years | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tata Ratan in Leading the Tata Group (A): The Ratan Tata Years Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Tata Ratan in the sector have low bargaining power. Leading the Tata Group (A): The Ratan Tata Years has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tata Ratan to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Tata Ratan is one of the leading recruiters in the industry. Managers in the Leading the Tata Group (A): The Ratan Tata Years 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
– Tata Ratan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tata Ratan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Leading the Tata Group (A): The Ratan Tata Years firm has clearly differentiated products in the market place. This has enabled Tata Ratan to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tata Ratan to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Leading the Tata Group (A): The Ratan Tata Years 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.
Innovation driven organization
– Tata Ratan is one of the most innovative firm in sector. Manager in Leading the Tata Group (A): The Ratan Tata Years Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Tata Ratan is present in almost all the verticals within the industry. This has provided firm in Leading the Tata Group (A): The Ratan Tata Years 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
– Tata Ratan 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 Tata Ratan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Tata Ratan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Tata Ratan
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tata Ratan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Tata Ratan 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.
Learning organization
- Tata Ratan 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 Tata Ratan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Leading the Tata Group (A): The Ratan Tata Years Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Leading the Tata Group (A): The Ratan Tata Years | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leading the Tata Group (A): The Ratan Tata Years are -
Workers concerns about automation
– As automation is fast increasing in the segment, Tata Ratan 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Leading the Tata Group (A): The Ratan Tata Years 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 Tata Ratan 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Tata Ratan is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tata Ratan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tata Ratan to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Leading the Tata Group (A): The Ratan Tata Years, it seems that the employees of Tata Ratan 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.
Skills based hiring
– The stress on hiring functional specialists at Tata Ratan has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Tata Ratan 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Leading the Tata Group (A): The Ratan Tata Years, is just above the industry average. Tata Ratan 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.
Lack of clear differentiation of Tata Ratan products
– To increase the profitability and margins on the products, Tata Ratan needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Leading the Tata Group (A): The Ratan Tata Years, in the dynamic environment Tata Ratan has struggled to respond to the nimble upstart competition. Tata Ratan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tata Ratan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Leading the Tata Group (A): The Ratan Tata Years can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Tata Ratan has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Leading the Tata Group (A): The Ratan Tata Years | 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 Leading the Tata Group (A): The Ratan Tata Years are -
Creating value in data economy
– The success of analytics program of Tata Ratan has opened avenues for new revenue streams for the organization in the industry. This can help Tata Ratan to build a more holistic ecosystem as suggested in the Leading the Tata Group (A): The Ratan Tata Years case study. Tata Ratan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Tata Ratan 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.
Building a culture of innovation
– managers at Tata Ratan 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.
Leveraging digital technologies
– Tata Ratan 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.
Buying journey improvements
– Tata Ratan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leading the Tata Group (A): The Ratan Tata Years 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.
Manufacturing automation
– Tata Ratan 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tata Ratan 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.
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. Tata Ratan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tata Ratan can use these opportunities to build new business models that can help the communities that Tata Ratan operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Ratan 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 Ratan 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tata Ratan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Ratan 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 Ratan 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 Leading the Tata Group (A): The Ratan Tata Years External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leading the Tata Group (A): The Ratan Tata Years are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tata Ratan needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Leading the Tata Group (A): The Ratan Tata Years, Tata Ratan 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 .
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.
Stagnating economy with rate increase
– Tata Ratan 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.
Regulatory challenges
– Tata Ratan 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.
Environmental challenges
– Tata Ratan 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 Ratan can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tata Ratan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Tata Ratan 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 Ratan 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 Tata Ratan.
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 Ratan in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Tata Ratan is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Leading the Tata Group (A): The Ratan Tata Years 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 Leading the Tata Group (A): The Ratan Tata Years 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 Leading the Tata Group (A): The Ratan Tata Years 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 Leading the Tata Group (A): The Ratan Tata Years 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 Leading the Tata Group (A): The Ratan Tata Years 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 Ratan needs to make to build a sustainable competitive advantage.