Ambuja Cement: Measuring the Value of Water SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ambuja Cement: Measuring the Value of Water
In 2016, Ambuja Cements Limited (Ambuja Cement) was one of the largest cement companies in India. Company operations required the use of water for cooling, dust suppression, and domestic needs, but the use of water stressed the water resources at some of the company's locations. Ambuja Cement thus identified the availability of water as a risk area for the organization and made water conservation a key element of their sustainability agenda. By virtue of its sustainability initiatives, Ambuja Cement became one of the first cement companies in the world to be certified as water positive. The company wanted to account for both the social and economic value its water conservation efforts generated. However, valuing water was a complex task involving many considerations, such as water sources and uses, the social value of water, water scarcity, and exchange rates. Utkarsh Majmudar is affiliated with Indian Institute of Management Udaipur.
Swot Analysis of "Ambuja Cement: Measuring the Value of Water" written by Utkarsh Majmudar, Namrata Rana includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Water Ambuja facing as an external strategic factors. Some of the topics covered in Ambuja Cement: Measuring the Value of Water case study are - Strategic Management Strategies, Manufacturing, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Ambuja Cement: Measuring the Value of Water casestudy better are - – technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Ambuja Cement: Measuring the Value of Water
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ambuja Cement: Measuring the Value of Water case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Water Ambuja, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Water Ambuja 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 Ambuja Cement: Measuring the Value of Water can be done for the following purposes –
1. Strategic planning using facts provided in Ambuja Cement: Measuring the Value of Water case study
2. Improving business portfolio management of Water Ambuja
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 Water Ambuja
Strengths Ambuja Cement: Measuring the Value of Water | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Water Ambuja in Ambuja Cement: Measuring the Value of Water Harvard Business Review case study are -
Organizational Resilience of Water Ambuja
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Water Ambuja 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
– Water Ambuja has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Water Ambuja 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
– Water Ambuja has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ambuja Cement: Measuring the Value of Water 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.
Learning organization
- Water Ambuja 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 Water Ambuja is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ambuja Cement: Measuring the Value of Water Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Water Ambuja has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Water Ambuja to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Water Ambuja 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 Ambuja Cement: Measuring the Value of Water - 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 recruit top talent
– Water Ambuja is one of the leading recruiters in the industry. Managers in the Ambuja Cement: Measuring the Value of Water are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Water Ambuja 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.
Strong track record of project management
– Water Ambuja is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Water Ambuja 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 Ambuja Cement: Measuring the Value of Water HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Water Ambuja 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.
Low bargaining power of suppliers
– Suppliers of Water Ambuja in the sector have low bargaining power. Ambuja Cement: Measuring the Value of Water has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Water Ambuja to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Ambuja Cement: Measuring the Value of Water | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ambuja Cement: Measuring the Value of Water are -
Aligning sales with marketing
– It come across in the case study Ambuja Cement: Measuring the Value of Water 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 Ambuja Cement: Measuring the Value of Water can leverage the sales team experience to cultivate customer relationships as Water Ambuja is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Water Ambuja 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.
Skills based hiring
– The stress on hiring functional specialists at Water Ambuja 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.
Increasing silos among functional specialists
– The organizational structure of Water Ambuja is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Water Ambuja needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Water Ambuja to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ambuja Cement: Measuring the Value of Water, in the dynamic environment Water Ambuja has struggled to respond to the nimble upstart competition. Water Ambuja has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Ambuja Cement: Measuring the Value of Water, 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 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 Water Ambuja supply chain. Even after few cautionary changes mentioned in the HBR case study - Ambuja Cement: Measuring the Value of Water, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Water Ambuja vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Water Ambuja 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Water Ambuja 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 bargaining power of channel partners
– Because of the regulatory requirements, Utkarsh Majmudar, Namrata Rana suggests that, Water Ambuja 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Water Ambuja is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ambuja Cement: Measuring the Value of Water can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Ambuja Cement: Measuring the Value of Water | 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 Ambuja Cement: Measuring the Value of Water are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Water Ambuja 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, Ambuja Cement: Measuring the Value of Water, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Water Ambuja 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. Water Ambuja 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Water Ambuja 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.
Creating value in data economy
– The success of analytics program of Water Ambuja has opened avenues for new revenue streams for the organization in the industry. This can help Water Ambuja to build a more holistic ecosystem as suggested in the Ambuja Cement: Measuring the Value of Water case study. Water Ambuja can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Water Ambuja 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.
Building a culture of innovation
– managers at Water Ambuja 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Water Ambuja can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Water Ambuja is facing challenges because of the dominance of functional experts in the organization. Ambuja Cement: Measuring the Value of Water 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Water Ambuja 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.
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 Water Ambuja in the consumer business. Now Water Ambuja can target international markets with far fewer capital restrictions requirements than the existing system.
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 Water Ambuja 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.
Manufacturing automation
– Water Ambuja can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Water Ambuja can use these opportunities to build new business models that can help the communities that Water Ambuja operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Ambuja Cement: Measuring the Value of Water External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ambuja Cement: Measuring the Value of Water are -
Technology acceleration in Forth Industrial Revolution
– Water Ambuja has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Water Ambuja 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.
Shortening product life cycle
– it is one of the major threat that Water Ambuja 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 Water Ambuja 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 Water Ambuja 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. Water Ambuja 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.
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.
Increasing wage structure of Water Ambuja
– 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 Water Ambuja.
Environmental challenges
– Water Ambuja 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. Water Ambuja can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Water Ambuja with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Water Ambuja in the Leadership & Managing People industry. The Leadership & Managing People 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
– Water Ambuja 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.
Consumer confidence and its impact on Water Ambuja 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Water Ambuja 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 Ambuja Cement: Measuring the Value of Water .
Weighted SWOT Analysis of Ambuja Cement: Measuring the Value of Water 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 Ambuja Cement: Measuring the Value of Water 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 Ambuja Cement: Measuring the Value of Water 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 Ambuja Cement: Measuring the Value of Water 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 Ambuja Cement: Measuring the Value of Water 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 Water Ambuja needs to make to build a sustainable competitive advantage.
