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 - – supply chains are disrupted by pandemic , wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, challanges to central banks by blockchain based private currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, 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 -
Strong track record of project management
– Airtel Bharti is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Sustainable margins compare to other players in Technology & Operations industry
– Bharti Airtel (B) firm has clearly differentiated products in the market place. This has enabled Airtel Bharti to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Airtel Bharti to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Airtel Bharti has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Airtel Bharti 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.
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.
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.
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.
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.
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.
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.
Ability to recruit top talent
– Airtel Bharti is one of the leading recruiters in the industry. Managers in the Bharti Airtel (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study Bharti Airtel (B) 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 Airtel Bharti 's lucrative customers.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Airtel Bharti is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Airtel Bharti needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Airtel Bharti to focus more on services rather than just following the product oriented approach.
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.
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.
Slow to strategic competitive environment developments
– As Bharti Airtel (B) HBR case study mentions - Airtel Bharti 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, 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.
No frontier risks strategy
– After analyzing the HBR case study Bharti Airtel (B), it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
High cash cycle compare to competitors
Airtel Bharti 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.
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 -
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.
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.
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.
Developing new processes and practices
– Airtel Bharti can develop new processes and procedures in Technology & Operations 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Airtel Bharti can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Airtel Bharti 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 Technology & Operations segment.
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.
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.
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 Airtel Bharti in the consumer business. Now Airtel Bharti can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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 -
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.
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. Airtel Bharti 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.
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 Airtel Bharti.
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.
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.
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) .
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.
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.
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.
Stagnating economy with rate increase
– Airtel Bharti 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.
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.
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.
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.