Amtek Auto Ltd.: From Acquisitions to a Financial Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study SWOT Analysis Solution
Case Study Description of Amtek Auto Ltd.: From Acquisitions to a Financial Crisis
In the summer of 2015, India-based Amtek Auto Ltd., one of the country's largest companies in the manufacturing of automotive components, was on the brink of financial ruin. After more than a decade of being immersed in a spending spree on acquisitions to build capacity and expand its clientA¨le in both the European and Asian auto markets, Amtek's stock plummeted by 50 per cent within two days as nervous investors worried about the company's ability to make its scheduled debt payments. Tensions were high as the company faced mounting pressure over its liquidity issues, and after reporting a net loss for the first time in two decades. With rumours of bankruptcy on the horizon, what steps could the company take to decrease its debt burden at a time when the automotive industry was in a slump? Should Amtek consider selling off some of its assets to raise the needed cash, or should it look to banks and investors? Gaurav Singh Chauhan is affiliated with Indian Institute of Management Indore. Gunjan Tomer is affiliated with Institute for Financial Management and Research.
Swot Analysis of "Amtek Auto Ltd.: From Acquisitions to a Financial Crisis" written by Gaurav Singh Chauhan, Gunjan Tomer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amtek Auto facing as an external strategic factors. Some of the topics covered in Amtek Auto Ltd.: From Acquisitions to a Financial Crisis case study are - Strategic Management Strategies, Financial management, Manufacturing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Amtek Auto Ltd.: From Acquisitions to a Financial Crisis casestudy better are - – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, technology disruption, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, increasing energy prices, etc
Introduction to SWOT Analysis of Amtek Auto Ltd.: From Acquisitions to a Financial Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amtek Auto Ltd.: From Acquisitions to a Financial Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amtek Auto, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amtek Auto 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Amtek Auto Ltd.: From Acquisitions to a Financial Crisis case study
2. Improving business portfolio management of Amtek Auto
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 Amtek Auto
Strengths Amtek Auto Ltd.: From Acquisitions to a Financial Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amtek Auto in Amtek Auto Ltd.: From Acquisitions to a Financial Crisis Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Amtek Auto Ltd.: From Acquisitions to a Financial Crisis firm has clearly differentiated products in the market place. This has enabled Amtek Auto to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Amtek Auto to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Amtek Auto is present in almost all the verticals within the industry. This has provided firm in Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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.
Ability to recruit top talent
– Amtek Auto is one of the leading recruiters in the industry. Managers in the Amtek Auto Ltd.: From Acquisitions to a Financial Crisis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Amtek Auto
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Amtek Auto does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Amtek Auto has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amtek Auto 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.
Ability to lead change in Finance & Accounting field
– Amtek Auto 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 Amtek Auto in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Amtek Auto 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Amtek Auto digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amtek Auto 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.
Effective Research and Development (R&D)
– Amtek Auto 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Amtek Auto 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 Gaurav Singh Chauhan, Gunjan Tomer 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.
Learning organization
- Amtek Auto 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 Amtek Auto is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Amtek Auto Ltd.: From Acquisitions to a Financial Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Amtek Auto in the sector have low bargaining power. Amtek Auto Ltd.: From Acquisitions to a Financial Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amtek Auto to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Amtek Auto Ltd.: From Acquisitions to a Financial Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amtek Auto Ltd.: From Acquisitions to a Financial Crisis are -
Skills based hiring
– The stress on hiring functional specialists at Amtek Auto 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.
Lack of clear differentiation of Amtek Auto products
– To increase the profitability and margins on the products, Amtek Auto needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Amtek Auto is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Amtek Auto needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amtek Auto to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Amtek Auto Ltd.: From Acquisitions to a Financial Crisis HBR case study mentions - Amtek Auto 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, Amtek Auto 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Amtek Auto is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto 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 - Amtek Auto Ltd.: From Acquisitions to a Financial Crisis should strive to include more intangible value offerings along with its core products and services.
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 Amtek Auto supply chain. Even after few cautionary changes mentioned in the HBR case study - Amtek Auto Ltd.: From Acquisitions to a Financial Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amtek Auto vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Amtek Auto Ltd.: From Acquisitions to a Financial Crisis, is just above the industry average. Amtek Auto 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Amtek Auto 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.
Opportunities Amtek Auto Ltd.: From Acquisitions to a Financial Crisis | 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis are -
Learning at scale
– Online learning technologies has now opened space for Amtek Auto 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, Amtek Auto 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, Amtek Auto Ltd.: From Acquisitions to a Financial Crisis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amtek Auto is facing challenges because of the dominance of functional experts in the organization. Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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.
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. Amtek Auto can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amtek Auto 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 Amtek Auto to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Amtek Auto 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.
Loyalty marketing
– Amtek Auto 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.
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 Amtek Auto 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amtek Auto can use these opportunities to build new business models that can help the communities that Amtek Auto operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Creating value in data economy
– The success of analytics program of Amtek Auto has opened avenues for new revenue streams for the organization in the industry. This can help Amtek Auto to build a more holistic ecosystem as suggested in the Amtek Auto Ltd.: From Acquisitions to a Financial Crisis case study. Amtek Auto can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amtek Auto 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.
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. Amtek Auto can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Amtek Auto can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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.
Threats Amtek Auto Ltd.: From Acquisitions to a Financial Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amtek Auto Ltd.: From Acquisitions to a Financial Crisis are -
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. Amtek Auto 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amtek Auto 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Amtek Auto Ltd.: From Acquisitions to a Financial Crisis, Amtek Auto may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Amtek Auto 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.
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 Amtek Auto business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Amtek Auto 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. Amtek Auto can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Amtek Auto can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Amtek Auto is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Amtek Auto needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Amtek Auto.
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.
Technology acceleration in Forth Industrial Revolution
– Amtek Auto has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Amtek Auto 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.
Weighted SWOT Analysis of Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto Ltd.: From Acquisitions to a Financial Crisis 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 Amtek Auto needs to make to build a sustainable competitive advantage.