Should Maruti Suzuki Invest in Electric Cars? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Should Maruti Suzuki Invest in Electric Cars?
In April 2017, the Indian government announced the country would be free of fossil fuel cars by 2030. Maruti Suzuki was the market leader in India's conventional passenger car segment, and did not agree that electric cars should be forced on the average consumer. Electric cars were very expensive and had limited mileage, making them a poor fit for Indian consumers, who were generally budget-conscious and mileage-obsessed. It would be very difficult to replace fossil fuel cars quickly, especially with largely non-existent infrastructure for the operation of electric cars. Maruti Suzuki wondered if it should wait for the uncertainty in the country to clear, while other car manufacturers took their chances on India's electric car market, or if it should expedite the process of building electric cars and keep its market leadership position intact. Veena Keshav Pailwar is affiliated with Institute of Management Technology, Nagpur.
Swot Analysis of "Should Maruti Suzuki Invest in Electric Cars?" written by Veena Keshav Pailwar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cars Electric facing as an external strategic factors. Some of the topics covered in Should Maruti Suzuki Invest in Electric Cars? case study are - Strategic Management Strategies, Economics and Global Business.
Some of the macro environment factors that can be used to understand the Should Maruti Suzuki Invest in Electric Cars? casestudy better are - – increasing energy prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing commodity prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Should Maruti Suzuki Invest in Electric Cars?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Should Maruti Suzuki Invest in Electric Cars? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cars Electric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cars Electric 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 Should Maruti Suzuki Invest in Electric Cars? can be done for the following purposes –
1. Strategic planning using facts provided in Should Maruti Suzuki Invest in Electric Cars? case study
2. Improving business portfolio management of Cars Electric
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cars Electric
Strengths Should Maruti Suzuki Invest in Electric Cars? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cars Electric in Should Maruti Suzuki Invest in Electric Cars? Harvard Business Review case study are -
Successful track record of launching new products
– Cars Electric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cars Electric 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.
Highly skilled collaborators
– Cars Electric 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 Should Maruti Suzuki Invest in Electric Cars? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Cars Electric is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Cars Electric 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 Veena Keshav Pailwar 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 Cars Electric in the sector have low bargaining power. Should Maruti Suzuki Invest in Electric Cars? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cars Electric to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Cars Electric 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 Should Maruti Suzuki Invest in Electric Cars? - 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 Global Business industry
– Should Maruti Suzuki Invest in Electric Cars? firm has clearly differentiated products in the market place. This has enabled Cars Electric to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Cars Electric to invest into research and development (R&D) and innovation.
Training and development
– Cars Electric has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Should Maruti Suzuki Invest in Electric Cars? 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.
Innovation driven organization
– Cars Electric is one of the most innovative firm in sector. Manager in Should Maruti Suzuki Invest in Electric Cars? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Cars Electric is one of the leading recruiters in the industry. Managers in the Should Maruti Suzuki Invest in Electric Cars? 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 brand equity
– Cars Electric has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cars Electric to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Cars Electric is present in almost all the verticals within the industry. This has provided firm in Should Maruti Suzuki Invest in Electric Cars? 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.
Weaknesses Should Maruti Suzuki Invest in Electric Cars? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Should Maruti Suzuki Invest in Electric Cars? are -
Skills based hiring
– The stress on hiring functional specialists at Cars Electric 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 star products
– The top 2 products and services of the firm as mentioned in the Should Maruti Suzuki Invest in Electric Cars? 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 Cars Electric has relatively successful track record of launching new products.
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 Cars Electric supply chain. Even after few cautionary changes mentioned in the HBR case study - Should Maruti Suzuki Invest in Electric Cars?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cars Electric vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Cars Electric is dominated by functional specialists. It is not different from other players in the Global Business segment. Cars Electric needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cars Electric to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Cars Electric products
– To increase the profitability and margins on the products, Cars Electric needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Cars Electric 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.
Low market penetration in new markets
– Outside its home market of Cars Electric, firm in the HBR case study Should Maruti Suzuki Invest in Electric Cars? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cars Electric is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Should Maruti Suzuki Invest in Electric Cars? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Veena Keshav Pailwar suggests that, Cars Electric 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.
Need for greater diversity
– Cars Electric 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 to strategic competitive environment developments
– As Should Maruti Suzuki Invest in Electric Cars? HBR case study mentions - Cars Electric takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Should Maruti Suzuki Invest in Electric Cars? | 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 Should Maruti Suzuki Invest in Electric Cars? are -
Learning at scale
– Online learning technologies has now opened space for Cars Electric 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.
Better consumer reach
– The expansion of the 5G network will help Cars Electric to increase its market reach. Cars Electric 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cars Electric 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. Cars Electric 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.
Building a culture of innovation
– managers at Cars Electric 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 Global Business segment.
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. Cars Electric can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Cars Electric in the consumer business. Now Cars Electric can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cars Electric in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Cars Electric 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, Cars Electric is facing challenges because of the dominance of functional experts in the organization. Should Maruti Suzuki Invest in Electric Cars? 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.
Creating value in data economy
– The success of analytics program of Cars Electric has opened avenues for new revenue streams for the organization in the industry. This can help Cars Electric to build a more holistic ecosystem as suggested in the Should Maruti Suzuki Invest in Electric Cars? case study. Cars Electric can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cars Electric can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Cars Electric 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cars Electric 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, Should Maruti Suzuki Invest in Electric Cars?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Should Maruti Suzuki Invest in Electric Cars? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Should Maruti Suzuki Invest in Electric Cars? are -
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 Cars Electric in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Cars Electric 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. Cars Electric can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cars Electric in the Global Business industry. The Global Business 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.
Shortening product life cycle
– it is one of the major threat that Cars Electric is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Cars Electric 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 Global Business industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cars Electric 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 Should Maruti Suzuki Invest in Electric Cars? .
Increasing wage structure of Cars Electric
– 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 Cars Electric.
Technology acceleration in Forth Industrial Revolution
– Cars Electric has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Cars Electric needs to keep up with the evolution of technology in the Global Business 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cars Electric can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Cars Electric 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Should Maruti Suzuki Invest in Electric Cars?, Cars Electric may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Cars Electric business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Should Maruti Suzuki Invest in Electric Cars? 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 Should Maruti Suzuki Invest in Electric Cars? 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 Should Maruti Suzuki Invest in Electric Cars? 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 Should Maruti Suzuki Invest in Electric Cars? 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 Should Maruti Suzuki Invest in Electric Cars? 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 Cars Electric needs to make to build a sustainable competitive advantage.
