Azim Premji Trust: The Endowment Model in an Emerging Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Azim Premji Trust: The Endowment Model in an Emerging Market
The Azim Premji Trust, among the largest philanthropic trusts in India, had its origins in 2001, when Azim Premji transferred Wipro shares worth US$ 125 million to the trust. As of March 31, 2017, the trust had a corpus fund of US$ 9 billion. The trust's goal was to support Premji's philanthropic pursuits through two organizations -- the Azim Premji Foundation and Azim Premji Philanthropic Initiatives. Both beneficiaries had distinct, ambitious philanthropic objectives that required large, ongoing funding. The trust's Chief Endowment Officer, K. R. Lakshminarayana, had been given the responsibility of planning the future of one of India's first endowments. The endowment was tasked with maximizing total return over a long horizon. Therefore, the trust had deliberately been created as a taxable entity to allow it the freedom to make large investments in equities and alternatives. The case describes the challenges Lakshminarayana, widely known as Lan, faced in arriving at a strategic asset allocation model in an emerging market with limited investment talent and investment firms and constraints on the trust's ability to invest outside India.
Authors :: Vikram Kuriyan, Unnati Ved, Geetika Shah
Topics :: Finance & Accounting
Tags :: Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Azim Premji Trust: The Endowment Model in an Emerging Market" written by Vikram Kuriyan, Unnati Ved, Geetika Shah includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Azim Premji facing as an external strategic factors. Some of the topics covered in Azim Premji Trust: The Endowment Model in an Emerging Market case study are - Strategic Management Strategies, Social enterprise, Social responsibility and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Azim Premji Trust: The Endowment Model in an Emerging Market casestudy better are - – wage bills are increasing, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Azim Premji Trust: The Endowment Model in an Emerging Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Azim Premji Trust: The Endowment Model in an Emerging Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Azim Premji, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Azim Premji 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 Azim Premji Trust: The Endowment Model in an Emerging Market can be done for the following purposes –
1. Strategic planning using facts provided in Azim Premji Trust: The Endowment Model in an Emerging Market case study
2. Improving business portfolio management of Azim Premji
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Azim Premji
Strengths Azim Premji Trust: The Endowment Model in an Emerging Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Azim Premji in Azim Premji Trust: The Endowment Model in an Emerging Market Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Azim Premji 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
– Azim Premji 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 Vikram Kuriyan, Unnati Ved, Geetika Shah 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.
Learning organization
- Azim Premji 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 Azim Premji is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Azim Premji Trust: The Endowment Model in an Emerging Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Finance & Accounting industry
– Azim Premji Trust: The Endowment Model in an Emerging Market firm has clearly differentiated products in the market place. This has enabled Azim Premji to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Azim Premji to invest into research and development (R&D) and innovation.
Strong track record of project management
– Azim Premji is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Azim Premji Trust: The Endowment Model in an Emerging Market 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Azim Premji digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Azim Premji 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.
Diverse revenue streams
– Azim Premji is present in almost all the verticals within the industry. This has provided firm in Azim Premji Trust: The Endowment Model in an Emerging Market 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.
Successful track record of launching new products
– Azim Premji has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Azim Premji 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.
Innovation driven organization
– Azim Premji is one of the most innovative firm in sector. Manager in Azim Premji Trust: The Endowment Model in an Emerging Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Finance & Accounting field
– Azim Premji 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 Azim Premji in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Azim Premji has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Azim Premji to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Azim Premji Trust: The Endowment Model in an Emerging Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Azim Premji Trust: The Endowment Model in an Emerging Market are -
Need for greater diversity
– Azim Premji 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Azim Premji Trust: The Endowment Model in an Emerging Market, is just above the industry average. Azim Premji 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 operating costs
– Compare to the competitors, firm in the HBR case study Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji 's lucrative customers.
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 Azim Premji supply chain. Even after few cautionary changes mentioned in the HBR case study - Azim Premji Trust: The Endowment Model in an Emerging Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Azim Premji vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji Trust: The Endowment Model in an Emerging Market can leverage the sales team experience to cultivate customer relationships as Azim Premji is planning to shift buying processes online.
Interest costs
– Compare to the competition, Azim Premji 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.
Increasing silos among functional specialists
– The organizational structure of Azim Premji is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Azim Premji needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Azim Premji to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Azim Premji is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Azim Premji Trust: The Endowment Model in an Emerging Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Azim Premji Trust: The Endowment Model in an Emerging Market, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Azim Premji needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji has relatively successful track record of launching new products.
Opportunities Azim Premji Trust: The Endowment Model in an Emerging Market | 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 Azim Premji Trust: The Endowment Model in an Emerging Market are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Azim Premji 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, Azim Premji Trust: The Endowment Model in an Emerging Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Azim Premji can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Azim Premji can develop new processes and procedures in Finance & Accounting 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Azim Premji is facing challenges because of the dominance of functional experts in the organization. Azim Premji Trust: The Endowment Model in an Emerging Market 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.
Loyalty marketing
– Azim Premji 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.
Leveraging digital technologies
– Azim Premji 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, Azim Premji 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.
Learning at scale
– Online learning technologies has now opened space for Azim Premji 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Azim Premji 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 Azim Premji to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Azim Premji can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Azim Premji Trust: The Endowment Model in an Emerging Market 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Azim Premji can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Azim Premji 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 Finance & Accounting segment.
Creating value in data economy
– The success of analytics program of Azim Premji has opened avenues for new revenue streams for the organization in the industry. This can help Azim Premji to build a more holistic ecosystem as suggested in the Azim Premji Trust: The Endowment Model in an Emerging Market case study. Azim Premji can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Azim Premji Trust: The Endowment Model in an Emerging Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Azim Premji Trust: The Endowment Model in an Emerging Market are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Azim Premji needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Azim Premji business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Azim Premji 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, Azim Premji 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 Azim Premji Trust: The Endowment Model in an Emerging Market .
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 Azim Premji in the Finance & Accounting sector and impact the bottomline of the organization.
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 Azim Premji.
Environmental challenges
– Azim Premji 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. Azim Premji can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Shortening product life cycle
– it is one of the major threat that Azim Premji is facing in Finance & Accounting 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 Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Azim Premji can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Azim Premji 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.
Stagnating economy with rate increase
– Azim Premji 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.
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. Azim Premji 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Azim Premji in the Finance & Accounting industry. The Finance & Accounting 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.
Weighted SWOT Analysis of Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji Trust: The Endowment Model in an Emerging Market 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 Azim Premji needs to make to build a sustainable competitive advantage.
