Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing commodity prices, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , technology disruption,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
Ability to lead change in Strategy & Execution field
– Sona Competitiveness 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 Sona Competitiveness 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 Sona Competitiveness in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Sona Competitiveness in the sector have low bargaining power. Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sona Competitiveness to manage not only supply disruptions but also source products at highly competitive prices.
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.
Ability to recruit top talent
– Sona Competitiveness is one of the leading recruiters in the industry. Managers in the Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Sona Competitiveness 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 Kirankumar Momaya, Chintan Shivani 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.
High brand equity
– Sona Competitiveness has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sona Competitiveness to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Training and development
– Sona Competitiveness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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.
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 -
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 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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry, 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 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.
Aligning sales with marketing
– It come across in the case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry 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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry can leverage the sales team experience to cultivate customer relationships as Sona Competitiveness is planning to shift buying processes online.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry, in the dynamic environment Sona Competitiveness has struggled to respond to the nimble upstart competition. Sona Competitiveness has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Sona Competitiveness 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.
Interest costs
– Compare to the competition, Sona Competitiveness 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 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 -
Loyalty marketing
– Sona Competitiveness 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.
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.
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.
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.
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.
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.
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. Sona Competitiveness can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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 Sona Competitiveness 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.
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.
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. Sona Competitiveness 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. Sona Competitiveness 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.
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.
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 -
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.
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.
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 Sona Koyo Steering Systems Limited: Spearheading Competitiveness in India's Automotive Components Industry, Sona Competitiveness 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 .
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.
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 .
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.
Environmental challenges
– Sona Competitiveness 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. Sona Competitiveness can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sona Competitiveness with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Sona Competitiveness needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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