Agarwal Automobiles: Fuel Station Forecasting and Inventory Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Agarwal Automobiles: Fuel Station Forecasting and Inventory Management
On June 1, 2016 a student was preparing for a summer job with Agarwal Automobiles, a vehicle fuel station owned by his father. The student had taken courses that covered supply chain management, including inventory management and forecasting. His father had suggested that, as a summer project, the student examine the fuel station's retail inventory management practices with the intention of replacing the current simple rules with a more rational and complex planning model. The student needed some ideas to use as a guide toward a better ordering policy. The available data for the previous six months suggested that the company held an average ending inventory of a??2.1 million worth of fuel products to maintain average daily sales of a??0.52 million. The challenge was to reduce the inventory levels, while maintaining a high customer service level in fuel sales. The authors Saurabh Chandra, Aditya Agarwal, and Sanjay C. Choudhari are affiliated with Indian Institute of Management Indore.
Swot Analysis of "Agarwal Automobiles: Fuel Station Forecasting and Inventory Management" written by Saurabh Chandra, Aditya Agarwal, Sanjay Choudhari includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fuel Inventory facing as an external strategic factors. Some of the topics covered in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management case study are - Strategic Management Strategies, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Agarwal Automobiles: Fuel Station Forecasting and Inventory Management casestudy better are - – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Agarwal Automobiles: Fuel Station Forecasting and Inventory Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fuel Inventory, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fuel Inventory 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management can be done for the following purposes –
1. Strategic planning using facts provided in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management case study
2. Improving business portfolio management of Fuel Inventory
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 Fuel Inventory
Strengths Agarwal Automobiles: Fuel Station Forecasting and Inventory Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fuel Inventory in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Fuel Inventory 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 Fuel Inventory in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Fuel Inventory has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fuel Inventory to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Fuel Inventory 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management - 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 Technology & Operations industry
– Agarwal Automobiles: Fuel Station Forecasting and Inventory Management firm has clearly differentiated products in the market place. This has enabled Fuel Inventory to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Fuel Inventory to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Fuel Inventory 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.
Learning organization
- Fuel Inventory 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 Fuel Inventory is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Fuel Inventory is present in almost all the verticals within the industry. This has provided firm in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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.
Strong track record of project management
– Fuel Inventory is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Fuel Inventory digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fuel Inventory 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.
Ability to recruit top talent
– Fuel Inventory is one of the leading recruiters in the industry. Managers in the Agarwal Automobiles: Fuel Station Forecasting and Inventory Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Fuel Inventory has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fuel Inventory 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.
Training and development
– Fuel Inventory has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Agarwal Automobiles: Fuel Station Forecasting and Inventory Management are -
Lack of clear differentiation of Fuel Inventory products
– To increase the profitability and margins on the products, Fuel Inventory needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fuel Inventory is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Agarwal Automobiles: Fuel Station Forecasting and Inventory Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Agarwal Automobiles: Fuel Station Forecasting and Inventory Management, it seems that the employees of Fuel Inventory 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.
Aligning sales with marketing
– It come across in the case study Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management can leverage the sales team experience to cultivate customer relationships as Fuel Inventory is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Agarwal Automobiles: Fuel Station Forecasting and Inventory Management, in the dynamic environment Fuel Inventory has struggled to respond to the nimble upstart competition. Fuel Inventory has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Fuel Inventory needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Agarwal Automobiles: Fuel Station Forecasting and Inventory Management HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fuel Inventory has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Fuel Inventory is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fuel Inventory needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fuel Inventory to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Fuel Inventory 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Saurabh Chandra, Aditya Agarwal, Sanjay Choudhari suggests that, Fuel Inventory 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.
Skills based hiring
– The stress on hiring functional specialists at Fuel Inventory 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.
Opportunities Agarwal Automobiles: Fuel Station Forecasting and Inventory Management | 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management are -
Manufacturing automation
– Fuel Inventory 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fuel Inventory 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, Agarwal Automobiles: Fuel Station Forecasting and Inventory Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Fuel Inventory can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fuel Inventory is facing challenges because of the dominance of functional experts in the organization. Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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.
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 Fuel Inventory in the consumer business. Now Fuel Inventory can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Fuel Inventory 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.
Using analytics as competitive advantage
– Fuel Inventory 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fuel Inventory to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fuel Inventory can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Fuel Inventory 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fuel Inventory 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.
Learning at scale
– Online learning technologies has now opened space for Fuel Inventory 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.
Creating value in data economy
– The success of analytics program of Fuel Inventory has opened avenues for new revenue streams for the organization in the industry. This can help Fuel Inventory to build a more holistic ecosystem as suggested in the Agarwal Automobiles: Fuel Station Forecasting and Inventory Management case study. Fuel Inventory can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Fuel Inventory can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Agarwal Automobiles: Fuel Station Forecasting and Inventory Management are -
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 Fuel Inventory.
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. Fuel Inventory can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Fuel Inventory 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.
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 Fuel Inventory
– 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 Fuel Inventory.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fuel Inventory with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Fuel Inventory 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.
Technology acceleration in Forth Industrial Revolution
– Fuel Inventory has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Fuel Inventory 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.
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 Fuel Inventory 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. Fuel Inventory needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Consumer confidence and its impact on Fuel Inventory demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Fuel Inventory 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Agarwal Automobiles: Fuel Station Forecasting and Inventory Management, Fuel Inventory may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Weighted SWOT Analysis of Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Agarwal Automobiles: Fuel Station Forecasting and Inventory Management 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 Fuel Inventory needs to make to build a sustainable competitive advantage.
