Aqua Logistics Limited: An Attractive Target for Acquisition? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aqua Logistics Limited: An Attractive Target for Acquisition?
Aqua Logistics Limited, one of India's leading logistics and supply chain management companies, suffered from poor financial management and was witnessing slowing demand in the industry. The company had significant financial debt to banks and financial institutions. Owing to such difficulties in managing its operations in a largely fragmented industry, the firm - with its strong network in multimodal transport and in the third-party logistics model of delivery - was a good target for companies seeking to consolidate their position in the industry. An acquiring firm, however, would want to answer several questions. What were the possible value drivers of Aqua Logistics Limited? From where would the synergistic gains be realized through an acquisition? How much should be offered for the acquisition? Gaurav Singh Chauhan is affiliated with Indian Institute of Management Indore. Pradip Banerjee is affiliated with Indian Institute of Management Indore.
Swot Analysis of "Aqua Logistics Limited: An Attractive Target for Acquisition?" written by Gaurav Singh Chauhan, Pradip Banerjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aqua Logistics facing as an external strategic factors. Some of the topics covered in Aqua Logistics Limited: An Attractive Target for Acquisition? case study are - Strategic Management Strategies, Mergers & acquisitions, Operations management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Aqua Logistics Limited: An Attractive Target for Acquisition? casestudy better are - – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of Aqua Logistics Limited: An Attractive Target for Acquisition?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aqua Logistics Limited: An Attractive Target for Acquisition? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aqua Logistics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aqua Logistics 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 Aqua Logistics Limited: An Attractive Target for Acquisition? can be done for the following purposes –
1. Strategic planning using facts provided in Aqua Logistics Limited: An Attractive Target for Acquisition? case study
2. Improving business portfolio management of Aqua Logistics
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 Aqua Logistics
Strengths Aqua Logistics Limited: An Attractive Target for Acquisition? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aqua Logistics in Aqua Logistics Limited: An Attractive Target for Acquisition? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Aqua Logistics Limited: An Attractive Target for Acquisition? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Aqua Logistics is one of the most innovative firm in sector. Manager in Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aqua Logistics 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.
Highly skilled collaborators
– Aqua Logistics 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 Aqua Logistics Limited: An Attractive Target for Acquisition? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Aqua Logistics in the sector have low bargaining power. Aqua Logistics Limited: An Attractive Target for Acquisition? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aqua Logistics to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Aqua Logistics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aqua Logistics 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
– Aqua Logistics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aqua Logistics 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.
Learning organization
- Aqua Logistics 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 Aqua Logistics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aqua Logistics Limited: An Attractive Target for Acquisition? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Aqua Logistics 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 Aqua Logistics Limited: An Attractive Target for Acquisition? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Aqua Logistics Limited: An Attractive Target for Acquisition? firm has clearly differentiated products in the market place. This has enabled Aqua Logistics to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Aqua Logistics to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Aqua Logistics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Aqua Logistics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aqua Logistics Limited: An Attractive Target for Acquisition? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Aqua Logistics Limited: An Attractive Target for Acquisition? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aqua Logistics Limited: An Attractive Target for Acquisition? are -
Need for greater diversity
– Aqua Logistics 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Aqua Logistics Limited: An Attractive Target for Acquisition?, in the dynamic environment Aqua Logistics has struggled to respond to the nimble upstart competition. Aqua Logistics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Aqua Logistics products
– To increase the profitability and margins on the products, Aqua Logistics needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aqua Logistics Limited: An Attractive Target for Acquisition?, is just above the industry average. Aqua Logistics 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, Gaurav Singh Chauhan, Pradip Banerjee suggests that, Aqua Logistics 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.
Increasing silos among functional specialists
– The organizational structure of Aqua Logistics is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Aqua Logistics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aqua Logistics to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Aqua Logistics 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 - Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics supply chain. Even after few cautionary changes mentioned in the HBR case study - Aqua Logistics Limited: An Attractive Target for Acquisition?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aqua Logistics vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics Limited: An Attractive Target for Acquisition? can leverage the sales team experience to cultivate customer relationships as Aqua Logistics is planning to shift buying processes online.
Interest costs
– Compare to the competition, Aqua Logistics 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Aqua Logistics Limited: An Attractive Target for Acquisition?, it seems that the employees of Aqua Logistics 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.
Opportunities Aqua Logistics Limited: An Attractive Target for Acquisition? | 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 Aqua Logistics Limited: An Attractive Target for Acquisition? are -
Better consumer reach
– The expansion of the 5G network will help Aqua Logistics to increase its market reach. Aqua Logistics 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 Aqua Logistics in the consumer business. Now Aqua Logistics can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Aqua Logistics 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.
Loyalty marketing
– Aqua Logistics 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.
Creating value in data economy
– The success of analytics program of Aqua Logistics has opened avenues for new revenue streams for the organization in the industry. This can help Aqua Logistics to build a more holistic ecosystem as suggested in the Aqua Logistics Limited: An Attractive Target for Acquisition? case study. Aqua Logistics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aqua Logistics is facing challenges because of the dominance of functional experts in the organization. Aqua Logistics Limited: An Attractive Target for Acquisition? 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.
Learning at scale
– Online learning technologies has now opened space for Aqua Logistics 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aqua Logistics 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aqua Logistics can use these opportunities to build new business models that can help the communities that Aqua Logistics operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Aqua Logistics 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.
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. Aqua Logistics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aqua Logistics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Aqua Logistics can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Threats Aqua Logistics Limited: An Attractive Target for Acquisition? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aqua Logistics Limited: An Attractive Target for Acquisition? are -
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 wage structure of Aqua Logistics
– 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 Aqua Logistics.
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. Aqua Logistics 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.
Shortening product life cycle
– it is one of the major threat that Aqua Logistics is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Aqua Logistics in the Finance & Accounting 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. Aqua Logistics needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aqua Logistics 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 Aqua Logistics Limited: An Attractive Target for Acquisition? .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aqua Logistics in the Finance & Accounting industry. The Finance & Accounting 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.
High dependence on third party suppliers
– Aqua Logistics 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.
Technology acceleration in Forth Industrial Revolution
– Aqua Logistics has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Aqua Logistics 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.
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 Aqua Logistics.
Regulatory challenges
– Aqua Logistics 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.
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 Aqua Logistics business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics Limited: An Attractive Target for Acquisition? 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 Aqua Logistics needs to make to build a sustainable competitive advantage.
