Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry
Since the mid-1980s, Sona Steering Systems (later renamed as Sona Koyo Steering Systems Ltd) has been a competitive player in the Indian auto component industry. The firm has made remarkable progress in competitiveness through numerous initiatives over the past two decades. Starting as a single-source supplier of simple mechanical steering systems, the firm has systematically improved competitiveness, evolving into a capable Deming Prize-winning firm with capabilities across the industry value system. By November 2005, the firm had many customers and, for some of them, had designed entire systems to their specifications. This case provides a context for identifying Sona Koyo's sources of competitiveness through two important concepts. The versatile yet simple assets-processes-performance (APP) framework is used to identify relevant factors of competitiveness, while the concept of the "competitiveness journey" is introduced to examine different contexts, scenarios, strategies and initiatives as well as company performance. The case builds on analysis of data and insights culled from professionals at different levels of the company, up to the chairman.
Swot Analysis of "Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry" written by Kirankumar Momaya, Chintan Shivani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sona Competitiveness facing as an external strategic factors. Some of the topics covered in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry case study are - Strategic Management Strategies, Change management, Joint ventures, Leadership, Product development and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry casestudy better are - – wage bills are increasing, cloud computing is disrupting traditional business models, there is backlash against globalization, technology disruption, supply chains are disrupted by pandemic , increasing transportation and logistics costs, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sona Competitiveness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sona Competitiveness 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry can be done for the following purposes –
1. Strategic planning using facts provided in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry case study
2. Improving business portfolio management of Sona Competitiveness
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 Sona Competitiveness
Strengths Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sona Competitiveness in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry Harvard Business Review case study are -
Diverse revenue streams
– Sona Competitiveness is present in almost all the verticals within the industry. This has provided firm in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry firm has clearly differentiated products in the market place. This has enabled Sona Competitiveness to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sona Competitiveness to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Sona Competitiveness 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.
Successful track record of launching new products
– Sona Competitiveness has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sona Competitiveness 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.
Superior customer experience
– The customer experience strategy of Sona Competitiveness in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Sona Competitiveness digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sona Competitiveness has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Sona Competitiveness 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)
– Sona Competitiveness 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Sona Competitiveness is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Sona Competitiveness 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Sona Competitiveness is one of the most innovative firm in sector. Manager in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry are -
Products dominated business model
– Even though Sona Competitiveness 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 - Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sona Competitiveness is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Sona Competitiveness is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sona Competitiveness needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sona Competitiveness to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Sona Competitiveness 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry HBR case study mentions - Sona Competitiveness 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 decision making process
– As mentioned earlier in the report, Sona Competitiveness 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. Sona Competitiveness 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry, it seems that the employees of Sona Competitiveness 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry, is just above the industry average. Sona Competitiveness 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kirankumar Momaya, Chintan Shivani suggests that, Sona Competitiveness 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Competitiveness 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Sona Competitiveness 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.
Opportunities Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry | 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry are -
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 Sona Competitiveness in the consumer business. Now Sona Competitiveness can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Sona Competitiveness can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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.
Building a culture of innovation
– managers at Sona Competitiveness 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.
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. Sona Competitiveness can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sona Competitiveness is facing challenges because of the dominance of functional experts in the organization. Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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, Sona Competitiveness 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sona Competitiveness 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, Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry, 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 Sona Competitiveness to increase its market reach. Sona Competitiveness 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.
Manufacturing automation
– Sona Competitiveness 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sona Competitiveness 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 Sona Competitiveness to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Sona Competitiveness 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.
Creating value in data economy
– The success of analytics program of Sona Competitiveness has opened avenues for new revenue streams for the organization in the industry. This can help Sona Competitiveness to build a more holistic ecosystem as suggested in the Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry case study. Sona Competitiveness can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Sona Competitiveness 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.
Threats Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry are -
Regulatory challenges
– Sona Competitiveness 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.
Consumer confidence and its impact on Sona Competitiveness 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.
Increasing wage structure of Sona Competitiveness
– 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 Sona Competitiveness.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sona Competitiveness 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.
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 Sona Competitiveness.
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 Sona Competitiveness business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Sona Competitiveness is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Sona Competitiveness can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Sona Competitiveness has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Sona Competitiveness 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sona Competitiveness 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry .
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. Sona Competitiveness 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.
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 Sona Competitiveness in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Competitiveness needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry