This case study on India's wireless giant Bharti Airtel (Airtel) is the second of two cases on the company that show how the firm exemplifies many of the tenets set forth in the book The New Age of Innovation by CK Prahalad and MS Krishnan. Case B presents the students with the varied strategies that Airtel has pursued to become one of the most profitable wireless telecommunications companies in the world, despite the fact that it operates in one of the poorest countries on Earth. Airtel changed the industry by moving away from such standard metrics as Average Revenue Per User (ARPU) and has employed alternative measurements for success. It has also relied heavily on outsourcing non-core functions and designed unique Value-Added Services (VAS) for its varied customer base. The case asks students how Airtel can maintain its culture of innovation while growing quickly. How will it be able to remain agile, entrepreneurial, and flexible in the face of the necessary standardization that accompanies global expansion?
Authors :: C.K. Prahalad, M.S. Krishnan, Sheel Mohnot
Swot Analysis of "Bharti Airtel (B)" written by C.K. Prahalad, M.S. Krishnan, Sheel Mohnot includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airtel Bharti facing as an external strategic factors. Some of the topics covered in Bharti Airtel (B) case study are - Strategic Management Strategies, Government, Growth strategy and Technology & Operations.
Some of the macro environment factors that can be used to understand the Bharti Airtel (B) casestudy better are - – technology disruption, increasing energy prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Bharti Airtel (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bharti Airtel (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airtel Bharti, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airtel Bharti 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 Bharti Airtel (B) can be done for the following purposes –
1. Strategic planning using facts provided in Bharti Airtel (B) case study
2. Improving business portfolio management of Airtel Bharti
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Airtel Bharti
Strengths Bharti Airtel (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airtel Bharti in Bharti Airtel (B) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Airtel Bharti 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.
Analytics focus
– Airtel Bharti 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 C.K. Prahalad, M.S. Krishnan, Sheel Mohnot 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.
Effective Research and Development (R&D)
– Airtel Bharti 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 Bharti Airtel (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Airtel Bharti has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Airtel Bharti to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Airtel Bharti is present in almost all the verticals within the industry. This has provided firm in Bharti Airtel (B) 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.
Highly skilled collaborators
– Airtel Bharti 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 Bharti Airtel (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Airtel Bharti has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bharti Airtel (B) 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.
Innovation driven organization
– Airtel Bharti is one of the most innovative firm in sector. Manager in Bharti Airtel (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Airtel Bharti
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airtel Bharti 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 Airtel Bharti 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
- Airtel Bharti 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 Airtel Bharti is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bharti Airtel (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Airtel Bharti digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Airtel Bharti 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.
Weaknesses Bharti Airtel (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bharti Airtel (B) are -
Need for greater diversity
– Airtel Bharti 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bharti Airtel (B), it seems that the employees of Airtel Bharti 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.
Lack of clear differentiation of Airtel Bharti products
– To increase the profitability and margins on the products, Airtel Bharti needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Airtel Bharti 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.
Low market penetration in new markets
– Outside its home market of Airtel Bharti, firm in the HBR case study Bharti Airtel (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, C.K. Prahalad, M.S. Krishnan, Sheel Mohnot suggests that, Airtel Bharti is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, Airtel Bharti has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Airtel Bharti is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bharti Airtel (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Airtel Bharti 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 - Bharti Airtel (B) should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bharti Airtel (B), in the dynamic environment Airtel Bharti has struggled to respond to the nimble upstart competition. Airtel Bharti has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Airtel Bharti supply chain. Even after few cautionary changes mentioned in the HBR case study - Bharti Airtel (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Airtel Bharti vulnerable to further global disruptions in South East Asia.
Opportunities Bharti Airtel (B) | 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 Bharti Airtel (B) are -
Manufacturing automation
– Airtel Bharti can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Better consumer reach
– The expansion of the 5G network will help Airtel Bharti to increase its market reach. Airtel Bharti 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Airtel Bharti can use these opportunities to build new business models that can help the communities that Airtel Bharti operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Airtel Bharti can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Airtel Bharti 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.
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 Airtel Bharti 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Airtel Bharti 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Airtel Bharti 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 Airtel Bharti to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airtel Bharti in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Airtel Bharti 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 Bharti Airtel (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Airtel Bharti to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Airtel Bharti is facing challenges because of the dominance of functional experts in the organization. Bharti Airtel (B) 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.
Creating value in data economy
– The success of analytics program of Airtel Bharti has opened avenues for new revenue streams for the organization in the industry. This can help Airtel Bharti to build a more holistic ecosystem as suggested in the Bharti Airtel (B) case study. Airtel Bharti can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Airtel Bharti 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.
Threats Bharti Airtel (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bharti Airtel (B) are -
Environmental challenges
– Airtel Bharti 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. Airtel Bharti can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Airtel Bharti
– 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 Airtel Bharti.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Airtel Bharti in the Technology & Operations industry. The Technology & Operations 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Airtel Bharti 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 Bharti Airtel (B) .
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 Airtel Bharti in the Technology & Operations sector and impact the bottomline of the organization.
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. Airtel Bharti needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Airtel Bharti has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Airtel Bharti needs to keep up with the evolution of technology in the Technology & Operations 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.
Shortening product life cycle
– it is one of the major threat that Airtel Bharti is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Airtel Bharti 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Airtel Bharti can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Airtel Bharti 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 Technology & Operations industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Airtel Bharti with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Bharti Airtel (B) 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 Bharti Airtel (B) 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 Bharti Airtel (B) 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 Bharti Airtel (B) 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 Bharti Airtel (B) 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 Airtel Bharti needs to make to build a sustainable competitive advantage.
