Case Study Description of India's Demonetization: Purging Black Money?
On November 8, 2016, the Indian prime minister announced that in an effort to counter corruption, black money, and counterfeiting, high-value currency notes of 500 and 1,000 denominations would be withdrawn from circulation. The currency to be removed in the demonetization exercise was worth 15.4 trillion, or 86.9 per cent of the total value of currency in circulation. The old currency would be replaced with new 500 and 2,000 notes, but the transition would limit cash liquidity for 50 days in the Indian economy, which was heavily dependent on cash to facilitate both consumption and production. How would this process affect India, which had been identified as the world's fastest-growing economy? Would demonetization have the desired effect of purging the economy of black money and moving India toward a cashless economy with increased growth? Or would it simply bring India's remarkable growth story to a grinding halt and discourage investments? Tulsi Jayakumar is affiliated with SP Jain Institute of Management & Research.
Swot Analysis of "India's Demonetization: Purging Black Money?" written by Tulsi Jayakumar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 20b9 Demonetization facing as an external strategic factors. Some of the topics covered in India's Demonetization: Purging Black Money? case study are - Strategic Management Strategies, Policy and Global Business.
Some of the macro environment factors that can be used to understand the India's Demonetization: Purging Black Money? casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of India's Demonetization: Purging Black Money?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in India's Demonetization: Purging Black Money? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 20b9 Demonetization, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 20b9 Demonetization 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 India's Demonetization: Purging Black Money? can be done for the following purposes –
1. Strategic planning using facts provided in India's Demonetization: Purging Black Money? case study
2. Improving business portfolio management of 20b9 Demonetization
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 20b9 Demonetization
Strengths India's Demonetization: Purging Black Money? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 20b9 Demonetization in India's Demonetization: Purging Black Money? Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For 20b9 Demonetization digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. 20b9 Demonetization 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.
Strong track record of project management
– 20b9 Demonetization is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- 20b9 Demonetization 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 20b9 Demonetization is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in India's Demonetization: Purging Black Money? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the 20b9 Demonetization 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.
Ability to recruit top talent
– 20b9 Demonetization is one of the leading recruiters in the industry. Managers in the India's Demonetization: Purging Black Money? 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 20b9 Demonetization 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.
Operational resilience
– The operational resilience strategy in the India's Demonetization: Purging Black Money? 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.
Sustainable margins compare to other players in Global Business industry
– India's Demonetization: Purging Black Money? firm has clearly differentiated products in the market place. This has enabled 20b9 Demonetization to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped 20b9 Demonetization to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– 20b9 Demonetization 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 India's Demonetization: Purging Black Money? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of 20b9 Demonetization
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 20b9 Demonetization does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– 20b9 Demonetization has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 20b9 Demonetization to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– 20b9 Demonetization has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in India's Demonetization: Purging Black Money? 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.
Weaknesses India's Demonetization: Purging Black Money? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of India's Demonetization: Purging Black Money? are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study India's Demonetization: Purging Black Money?, it seems that the employees of 20b9 Demonetization 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.
Increasing silos among functional specialists
– The organizational structure of 20b9 Demonetization is dominated by functional specialists. It is not different from other players in the Global Business segment. 20b9 Demonetization needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help 20b9 Demonetization to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at 20b9 Demonetization 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 India's Demonetization: Purging Black Money? 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 20b9 Demonetization has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study India's Demonetization: Purging Black Money? 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 20b9 Demonetization '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 20b9 Demonetization supply chain. Even after few cautionary changes mentioned in the HBR case study - India's Demonetization: Purging Black Money?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left 20b9 Demonetization vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Tulsi Jayakumar suggests that, 20b9 Demonetization 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study India's Demonetization: Purging Black Money?, in the dynamic environment 20b9 Demonetization has struggled to respond to the nimble upstart competition. 20b9 Demonetization has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– 20b9 Demonetization has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, 20b9 Demonetization 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. 20b9 Demonetization 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.
Low market penetration in new markets
– Outside its home market of 20b9 Demonetization, firm in the HBR case study India's Demonetization: Purging Black Money? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities India's Demonetization: Purging Black Money? | 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 India's Demonetization: Purging Black Money? are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects 20b9 Demonetization can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 20b9 Demonetization 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 20b9 Demonetization is facing challenges because of the dominance of functional experts in the organization. India's Demonetization: Purging Black Money? 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, 20b9 Demonetization 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 20b9 Demonetization 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.
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. 20b9 Demonetization can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 20b9 Demonetization in the consumer business. Now 20b9 Demonetization can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help 20b9 Demonetization to increase its market reach. 20b9 Demonetization 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.
Creating value in data economy
– The success of analytics program of 20b9 Demonetization has opened avenues for new revenue streams for the organization in the industry. This can help 20b9 Demonetization to build a more holistic ecosystem as suggested in the India's Demonetization: Purging Black Money? case study. 20b9 Demonetization can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 20b9 Demonetization 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, 20b9 Demonetization 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, India's Demonetization: Purging Black Money?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– 20b9 Demonetization can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. India's Demonetization: Purging Black Money? 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.
Developing new processes and practices
– 20b9 Demonetization can develop new processes and procedures in Global Business 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.
Threats India's Demonetization: Purging Black Money? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study India's Demonetization: Purging Black Money? are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. 20b9 Demonetization 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
– 20b9 Demonetization 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.
Increasing wage structure of 20b9 Demonetization
– 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 20b9 Demonetization.
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. 20b9 Demonetization 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.
Consumer confidence and its impact on 20b9 Demonetization 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, 20b9 Demonetization 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 India's Demonetization: Purging Black Money? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study India's Demonetization: Purging Black Money?, 20b9 Demonetization 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents 20b9 Demonetization with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. 20b9 Demonetization needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– 20b9 Demonetization has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, 20b9 Demonetization 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.
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 20b9 Demonetization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 20b9 Demonetization 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.
Weighted SWOT Analysis of India's Demonetization: Purging Black Money? 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 India's Demonetization: Purging Black Money? 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 India's Demonetization: Purging Black Money? 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 India's Demonetization: Purging Black Money? 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 India's Demonetization: Purging Black Money? 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 20b9 Demonetization needs to make to build a sustainable competitive advantage.
