Aravind Eye Care System: Retaining the Legacy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aravind Eye Care System: Retaining the Legacy
The case deals with issues on the management of values in a family organization when it is growing and undergoing a generational transition. The organization at the center of this study is Aravind Eye Care System (Aravind), a non-profit organization managed as a trust but fully financially self-reliant, both for its current expenses and its expansion needs. It gave about 50% of its services free, and though its medical competence was unquestioned, its executives believed that its main strength was its value system. Though it may not be fully correct to call it a "family organization" (many of its top management people were not from the family at the time of the case events), family members were seen as having a special responsibility in not only managing the organization but also as custodians of its values and legacy. Its founder, Dr. Govindappa Venkataswamy (Dr. V), had passed away in 2006, and his siblings, who were responsible for building the hospital in its early years, had largely dissociated themselves from its day to day operations and even some aspects of its strategic management. The units were run by the second generation, who would themselves be retiring in a few years. The third generation members were already functioning at the lower levels of the organization, and in another five to ten years, the fourth generation would be coming in. The case presents Aravind Eye Care System's situation in this context, with a view to identifying the problems in retaining its legacy, which all of its executives agreed was not only invaluable but also the source of its competitive strength. It describes the different mechanisms employed in the organization to preserve the values and culture, such as recruitment, training, communication as regards the norms of behavior to patients, colleagues and staff and the reflections of its executives. regarding the continuance of the legacy.
Swot Analysis of "Aravind Eye Care System: Retaining the Legacy" written by Sankaran Manikutty, Kavil Ramachandran includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aravind Legacy facing as an external strategic factors. Some of the topics covered in Aravind Eye Care System: Retaining the Legacy case study are - Strategic Management Strategies, Organizational culture, Succession planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Aravind Eye Care System: Retaining the Legacy casestudy better are - – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, increasing commodity prices, increasing energy prices, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Aravind Eye Care System: Retaining the Legacy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aravind Eye Care System: Retaining the Legacy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aravind Legacy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aravind Legacy 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 Aravind Eye Care System: Retaining the Legacy can be done for the following purposes –
1. Strategic planning using facts provided in Aravind Eye Care System: Retaining the Legacy case study
2. Improving business portfolio management of Aravind Legacy
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aravind Legacy
Strengths Aravind Eye Care System: Retaining the Legacy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aravind Legacy in Aravind Eye Care System: Retaining the Legacy Harvard Business Review case study are -
Strong track record of project management
– Aravind Legacy 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
– Aravind Legacy is present in almost all the verticals within the industry. This has provided firm in Aravind Eye Care System: Retaining the Legacy 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.
Cross disciplinary teams
– Horizontal connected teams at the Aravind Legacy 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.
Highly skilled collaborators
– Aravind Legacy 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 Aravind Eye Care System: Retaining the Legacy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Aravind Legacy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aravind Legacy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Aravind Legacy 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 Aravind Eye Care System: Retaining the Legacy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Aravind Legacy 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 Aravind Legacy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Aravind Legacy 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 Sankaran Manikutty, Kavil Ramachandran 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.
Low bargaining power of suppliers
– Suppliers of Aravind Legacy in the sector have low bargaining power. Aravind Eye Care System: Retaining the Legacy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aravind Legacy to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Aravind Legacy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aravind Legacy 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.
Successful track record of launching new products
– Aravind Legacy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aravind Legacy 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
- Aravind Legacy 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 Aravind Legacy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aravind Eye Care System: Retaining the Legacy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Aravind Eye Care System: Retaining the Legacy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aravind Eye Care System: Retaining the Legacy are -
Need for greater diversity
– Aravind Legacy 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.
Slow decision making process
– As mentioned earlier in the report, Aravind Legacy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Aravind Legacy even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aravind Legacy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aravind Eye Care System: Retaining the Legacy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Aravind Legacy is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Aravind Legacy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aravind Legacy to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Aravind Legacy 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.
No frontier risks strategy
– After analyzing the HBR case study Aravind Eye Care System: Retaining the Legacy, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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
Aravind Legacy 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.
Products dominated business model
– Even though Aravind Legacy 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 - Aravind Eye Care System: Retaining the Legacy should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aravind Eye Care System: Retaining the Legacy, is just above the industry average. Aravind Legacy 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 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 Aravind Legacy supply chain. Even after few cautionary changes mentioned in the HBR case study - Aravind Eye Care System: Retaining the Legacy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aravind Legacy vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Aravind Legacy products
– To increase the profitability and margins on the products, Aravind Legacy needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Aravind Eye Care System: Retaining the Legacy | 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 Aravind Eye Care System: Retaining the Legacy are -
Developing new processes and practices
– Aravind Legacy can develop new processes and procedures in Leadership & Managing People 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
– Aravind Legacy 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 Aravind Eye Care System: Retaining the Legacy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aravind Legacy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Aravind Legacy 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 Leadership & Managing People segment.
Leveraging digital technologies
– Aravind Legacy 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aravind Legacy can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Aravind Legacy can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aravind Legacy 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, Aravind Eye Care System: Retaining the Legacy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Aravind Legacy 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aravind Legacy 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 Aravind Legacy to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aravind Legacy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Loyalty marketing
– Aravind Legacy 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aravind Legacy can use these opportunities to build new business models that can help the communities that Aravind Legacy operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Aravind Legacy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aravind Eye Care System: Retaining the Legacy 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.
Creating value in data economy
– The success of analytics program of Aravind Legacy has opened avenues for new revenue streams for the organization in the industry. This can help Aravind Legacy to build a more holistic ecosystem as suggested in the Aravind Eye Care System: Retaining the Legacy case study. Aravind Legacy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Aravind Eye Care System: Retaining the Legacy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aravind Eye Care System: Retaining the Legacy are -
Consumer confidence and its impact on Aravind Legacy 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aravind Eye Care System: Retaining the Legacy, Aravind Legacy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
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 Aravind Legacy in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Aravind Legacy 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 Aravind Legacy.
Regulatory challenges
– Aravind Legacy 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 Leadership & Managing People industry regulations.
High dependence on third party suppliers
– Aravind Legacy 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.
Shortening product life cycle
– it is one of the major threat that Aravind Legacy is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Aravind Legacy business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Aravind Legacy 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. Aravind Legacy can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aravind Legacy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Aravind Legacy has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Aravind Legacy needs to keep up with the evolution of technology in the Leadership & Managing People 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 Aravind Eye Care System: Retaining the Legacy 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 Aravind Eye Care System: Retaining the Legacy 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 Aravind Eye Care System: Retaining the Legacy 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 Aravind Eye Care System: Retaining the Legacy 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 Aravind Eye Care System: Retaining the Legacy 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 Aravind Legacy needs to make to build a sustainable competitive advantage.
