Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy
This case documents the history of Ashok Leyland (AL), the second largest commercial vehicle manufacturer in India, and captures its growth and journey up to 2007, when the company adopted its new vision of more than doubling in size in a fairly mature industry. The challenge that the case poses to students is to understand how the firm, widely regarded as a small player globally and as a regional one even within India, could fulfill this ambitious vision.
Swot Analysis of "Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy" written by Kannan Srikanth, Geetika Shah includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Leyland Ashok facing as an external strategic factors. Some of the topics covered in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy case study are - Strategic Management Strategies, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Leyland Ashok, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Leyland Ashok 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy case study
2. Improving business portfolio management of Leyland Ashok
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Leyland Ashok
Strengths Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Leyland Ashok in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy Harvard Business Review case study are -
Innovation driven organization
– Leyland Ashok is one of the most innovative firm in sector. Manager in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Leyland Ashok 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 Kannan Srikanth, 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.
Training and development
– Leyland Ashok has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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.
Ability to lead change in Strategy & Execution field
– Leyland Ashok 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 Leyland Ashok in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Leyland Ashok 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Leyland Ashok 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.
Diverse revenue streams
– Leyland Ashok is present in almost all the verticals within the industry. This has provided firm in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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.
Operational resilience
– The operational resilience strategy in the Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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.
Ability to recruit top talent
– Leyland Ashok is one of the leading recruiters in the industry. Managers in the Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Leyland Ashok in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Leyland Ashok 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 Leyland Ashok is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Leyland Ashok 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.
Weaknesses Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy are -
Products dominated business model
– Even though Leyland Ashok has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy HBR case study mentions - Leyland Ashok 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.
Low market penetration in new markets
– Outside its home market of Leyland Ashok, firm in the HBR case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Leyland Ashok 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.
Slow decision making process
– As mentioned earlier in the report, Leyland Ashok 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. Leyland Ashok 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.
Aligning sales with marketing
– It come across in the case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy can leverage the sales team experience to cultivate customer relationships as Leyland Ashok is planning to shift buying processes online.
Lack of clear differentiation of Leyland Ashok products
– To increase the profitability and margins on the products, Leyland Ashok needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Leyland Ashok 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 Leyland Ashok supply chain. Even after few cautionary changes mentioned in the HBR case study - Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Leyland Ashok vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Leyland Ashok 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.
Increasing silos among functional specialists
– The organizational structure of Leyland Ashok is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Leyland Ashok needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Leyland Ashok to focus more on services rather than just following the product oriented approach.
Opportunities Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy | 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Leyland Ashok 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, Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy, 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Leyland Ashok 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, Leyland Ashok is facing challenges because of the dominance of functional experts in the organization. Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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.
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. Leyland Ashok can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Leyland Ashok has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Leyland Ashok to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Leyland Ashok 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. Leyland Ashok 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.
Learning at scale
– Online learning technologies has now opened space for Leyland Ashok 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.
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 Leyland Ashok 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Leyland Ashok can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Leyland Ashok 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 Leyland Ashok to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Leyland Ashok can use these opportunities to build new business models that can help the communities that Leyland Ashok operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Leyland Ashok 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.
Better consumer reach
– The expansion of the 5G network will help Leyland Ashok to increase its market reach. Leyland Ashok 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.
Threats Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy are -
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. Leyland Ashok 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Leyland Ashok with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Leyland Ashok can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Leyland Ashok in the Strategy & Execution industry. The Strategy & Execution 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.
Consumer confidence and its impact on Leyland Ashok 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.
Stagnating economy with rate increase
– Leyland Ashok 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.
High dependence on third party suppliers
– Leyland Ashok 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.
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 Leyland Ashok in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Leyland Ashok is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Leyland Ashok 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 Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy, Leyland Ashok may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Leyland Ashok 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy .
Weighted SWOT Analysis of Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Leyland Ashok needs to make to build a sustainable competitive advantage.
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