Case Study Description of GMR Airport Concession: Mumbai Versus Delhi
In 2004, bids were invited from airport developers and operators for the development and operation of Mumbai's Chattrapati Shivaji International Airport and Delhi's Indira Gandhi International Airport. On January 31, 2006, a consortium led by GMR Group (GMR) was selected as the only technically qualified bidder. However, in order to avoid a monopoly in Indian airport operations, GMR was asked to choose between the two airports and match the financial bid of another bidder that was not technically qualified for the work. The Delhi airport, the pride of the National Capital Region, would serve as a gateway for participants, dignitaries, and other guests arriving for the upcoming Commonwealth Games to be held in New Delhi in October 2010. However, the Mumbai airport was the gateway to business investments in India. GMR faced a difficult choice between a mission-critical airport in the National Capital Region or an airport in India's commercial capital. Which airport would give GMR an edge in the global aviation sector? Which choice was in line with GMR's vision? Abhilash Nair is affiliated with Indian Institute of Management Kozhikode. Rajesh Srinivas Upadhyayula is affiliated with Indian Institute of Management Kozhikode.
Swot Analysis of "GMR Airport Concession: Mumbai Versus Delhi" written by Abhilash Nair, Rajesh Srinivas Upadhyayula includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airport Gmr facing as an external strategic factors. Some of the topics covered in GMR Airport Concession: Mumbai Versus Delhi case study are - Strategic Management Strategies, Financial markets, International business, Organizational culture, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the GMR Airport Concession: Mumbai Versus Delhi casestudy better are - – challanges to central banks by blockchain based private currencies, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of GMR Airport Concession: Mumbai Versus Delhi
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GMR Airport Concession: Mumbai Versus Delhi case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airport Gmr, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airport Gmr 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 GMR Airport Concession: Mumbai Versus Delhi can be done for the following purposes –
1. Strategic planning using facts provided in GMR Airport Concession: Mumbai Versus Delhi case study
2. Improving business portfolio management of Airport Gmr
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Airport Gmr
Strengths GMR Airport Concession: Mumbai Versus Delhi | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airport Gmr in GMR Airport Concession: Mumbai Versus Delhi Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Airport Gmr in the sector have low bargaining power. GMR Airport Concession: Mumbai Versus Delhi has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Airport Gmr to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Airport Gmr is one of the most innovative firm in sector. Manager in GMR Airport Concession: Mumbai Versus Delhi Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Airport Gmr digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Airport Gmr 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.
Diverse revenue streams
– Airport Gmr is present in almost all the verticals within the industry. This has provided firm in GMR Airport Concession: Mumbai Versus Delhi 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.
Training and development
– Airport Gmr has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in GMR Airport Concession: Mumbai Versus Delhi 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.
Cross disciplinary teams
– Horizontal connected teams at the Airport Gmr 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.
Sustainable margins compare to other players in Finance & Accounting industry
– GMR Airport Concession: Mumbai Versus Delhi firm has clearly differentiated products in the market place. This has enabled Airport Gmr to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Airport Gmr to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Airport Gmr 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 GMR Airport Concession: Mumbai Versus Delhi - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Airport Gmr 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 Airport Gmr is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GMR Airport Concession: Mumbai Versus Delhi Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Airport Gmr is one of the leading recruiters in the industry. Managers in the GMR Airport Concession: Mumbai Versus Delhi 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
– Airport Gmr 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 Abhilash Nair, Rajesh Srinivas Upadhyayula 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.
Organizational Resilience of Airport Gmr
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airport Gmr does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses GMR Airport Concession: Mumbai Versus Delhi | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GMR Airport Concession: Mumbai Versus Delhi are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Airport Gmr is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GMR Airport Concession: Mumbai Versus Delhi can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Airport Gmr, firm in the HBR case study GMR Airport Concession: Mumbai Versus Delhi needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As GMR Airport Concession: Mumbai Versus Delhi HBR case study mentions - Airport Gmr 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.
Interest costs
– Compare to the competition, Airport Gmr 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.
Aligning sales with marketing
– It come across in the case study GMR Airport Concession: Mumbai Versus Delhi 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 GMR Airport Concession: Mumbai Versus Delhi can leverage the sales team experience to cultivate customer relationships as Airport Gmr is planning to shift buying processes online.
Need for greater diversity
– Airport Gmr 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.
Products dominated business model
– Even though Airport Gmr 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 - GMR Airport Concession: Mumbai Versus Delhi should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Airport Gmr 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 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 Airport Gmr supply chain. Even after few cautionary changes mentioned in the HBR case study - GMR Airport Concession: Mumbai Versus Delhi, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Airport Gmr vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study GMR Airport Concession: Mumbai Versus Delhi, is just above the industry average. Airport Gmr 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, Abhilash Nair, Rajesh Srinivas Upadhyayula suggests that, Airport Gmr 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.
Opportunities GMR Airport Concession: Mumbai Versus Delhi | 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 GMR Airport Concession: Mumbai Versus Delhi are -
Building a culture of innovation
– managers at Airport Gmr 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 Finance & Accounting segment.
Leveraging digital technologies
– Airport Gmr 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.
Loyalty marketing
– Airport Gmr 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Airport Gmr 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. Airport Gmr 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.
Developing new processes and practices
– Airport Gmr can develop new processes and procedures in Finance & Accounting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Airport Gmr can use these opportunities to build new business models that can help the communities that Airport Gmr operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airport Gmr in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 Airport Gmr in the consumer business. Now Airport Gmr can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Airport Gmr 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.
Creating value in data economy
– The success of analytics program of Airport Gmr has opened avenues for new revenue streams for the organization in the industry. This can help Airport Gmr to build a more holistic ecosystem as suggested in the GMR Airport Concession: Mumbai Versus Delhi case study. Airport Gmr 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, Airport Gmr 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, GMR Airport Concession: Mumbai Versus Delhi, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Airport Gmr can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Airport Gmr has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study GMR Airport Concession: Mumbai Versus Delhi - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Airport Gmr to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats GMR Airport Concession: Mumbai Versus Delhi External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GMR Airport Concession: Mumbai Versus Delhi are -
High dependence on third party suppliers
– Airport Gmr 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.
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 Airport Gmr business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Airport Gmr is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Airport Gmr.
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 Airport Gmr in the Finance & Accounting sector and impact the bottomline of the organization.
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.
Technology acceleration in Forth Industrial Revolution
– Airport Gmr has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Airport Gmr needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
Environmental challenges
– Airport Gmr 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. Airport Gmr can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Stagnating economy with rate increase
– Airport Gmr 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
– Airport Gmr 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 Finance & Accounting 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. Airport Gmr 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Airport Gmr can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of GMR Airport Concession: Mumbai Versus Delhi 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 GMR Airport Concession: Mumbai Versus Delhi 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 GMR Airport Concession: Mumbai Versus Delhi 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 GMR Airport Concession: Mumbai Versus Delhi 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 GMR Airport Concession: Mumbai Versus Delhi 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 Airport Gmr needs to make to build a sustainable competitive advantage.