Case Study Description of Apoorva: A Facility Location Dilemma
In April 2016, the owner of Apoorva Mess (Apoorva) in Manipal, India, wwanted to open a full-service economical restaurant to reach out to customers, beat the competition, improve his sales, and fulfill his dream of serving quality food at affordable rates to the lower middle class. He was facing a dilemma over selecting the best location for establishing his new restaurant, knowing that the wrong choice would spell disaster for his business in the long run. A number of conflicting constraints were making it difficult for him to come to a decision. He wanted to follow a systematic approach to pinpoint the final location. The authors Debmallya Chatterjee and Amol S. Dhaigude are affiliated with T.A. Pai Management Institute.
Swot Analysis of "Apoorva: A Facility Location Dilemma" written by Debmallya Chatterjee, Amol Dhaigude includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Apoorva Location facing as an external strategic factors. Some of the topics covered in Apoorva: A Facility Location Dilemma case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the Apoorva: A Facility Location Dilemma casestudy better are - – challanges to central banks by blockchain based private currencies, geopolitical disruptions, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, etc
Introduction to SWOT Analysis of Apoorva: A Facility Location Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Apoorva: A Facility Location Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Apoorva Location, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Apoorva Location 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 Apoorva: A Facility Location Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Apoorva: A Facility Location Dilemma case study
2. Improving business portfolio management of Apoorva Location
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 Apoorva Location
Strengths Apoorva: A Facility Location Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Apoorva Location in Apoorva: A Facility Location Dilemma Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Apoorva: A Facility Location Dilemma firm has clearly differentiated products in the market place. This has enabled Apoorva Location to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Apoorva Location to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Apoorva: A Facility Location Dilemma 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.
Highly skilled collaborators
– Apoorva Location 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 Apoorva: A Facility Location Dilemma 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 Apoorva Location in the sector have low bargaining power. Apoorva: A Facility Location Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Apoorva Location to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Apoorva Location is one of the leading recruiters in the industry. Managers in the Apoorva: A Facility Location Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Apoorva Location in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Apoorva Location is one of the most innovative firm in sector. Manager in Apoorva: A Facility Location Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Apoorva Location 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.
Analytics focus
– Apoorva Location 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 Debmallya Chatterjee, Amol Dhaigude 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.
High brand equity
– Apoorva Location has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Apoorva Location to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Apoorva Location
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Apoorva Location does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Apoorva Location has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Apoorva: A Facility Location Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Apoorva: A Facility Location Dilemma are -
Capital Spending Reduction
– Even during the low interest decade, Apoorva Location 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.
Need for greater diversity
– Apoorva Location 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 operating costs
– Compare to the competitors, firm in the HBR case study Apoorva: A Facility Location Dilemma 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 Apoorva Location 's lucrative customers.
Interest costs
– Compare to the competition, Apoorva Location 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.
Lack of clear differentiation of Apoorva Location products
– To increase the profitability and margins on the products, Apoorva Location needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Apoorva: A Facility Location Dilemma, it seems that the employees of Apoorva Location 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.
Slow decision making process
– As mentioned earlier in the report, Apoorva Location 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. Apoorva Location 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.
Skills based hiring
– The stress on hiring functional specialists at Apoorva Location 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.
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 Apoorva Location supply chain. Even after few cautionary changes mentioned in the HBR case study - Apoorva: A Facility Location Dilemma, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Apoorva Location vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Apoorva Location 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 - Apoorva: A Facility Location Dilemma should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Apoorva Location is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Apoorva Location needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Apoorva Location to focus more on services rather than just following the product oriented approach.
Opportunities Apoorva: A Facility Location Dilemma | 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 Apoorva: A Facility Location Dilemma are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Apoorva Location 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 Apoorva Location to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Apoorva Location to increase its market reach. Apoorva Location 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 Apoorva Location in the consumer business. Now Apoorva Location can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Apoorva Location 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. Apoorva Location 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.
Loyalty marketing
– Apoorva Location 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Apoorva Location is facing challenges because of the dominance of functional experts in the organization. Apoorva: A Facility Location Dilemma 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Apoorva Location 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.
Manufacturing automation
– Apoorva Location 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.
Leveraging digital technologies
– Apoorva Location 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Apoorva Location can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Apoorva Location can use these opportunities to build new business models that can help the communities that Apoorva Location operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Buying journey improvements
– Apoorva Location can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Apoorva: A Facility Location Dilemma 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.
Building a culture of innovation
– managers at Apoorva Location can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Threats Apoorva: A Facility Location Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Apoorva: A Facility Location Dilemma are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Apoorva Location with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Apoorva Location is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Apoorva Location can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Apoorva Location 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. Apoorva Location can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Apoorva Location 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.
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 Apoorva Location business can come under increasing regulations regarding data privacy, data security, 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 Apoorva Location in the Technology & Operations sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Apoorva Location.
Increasing wage structure of Apoorva Location
– 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 Apoorva Location.
Technology acceleration in Forth Industrial Revolution
– Apoorva Location has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Apoorva Location 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Apoorva Location in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Apoorva Location 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.
Weighted SWOT Analysis of Apoorva: A Facility Location Dilemma 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 Apoorva: A Facility Location Dilemma 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 Apoorva: A Facility Location Dilemma 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 Apoorva: A Facility Location Dilemma 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 Apoorva: A Facility Location Dilemma 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 Apoorva Location needs to make to build a sustainable competitive advantage.