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 - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, technology disruption, 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 -
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.
Strong track record of project management
– Leyland Ashok is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– 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.
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.
Effective Research and Development (R&D)
– Leyland Ashok 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 Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
High brand equity
– Leyland Ashok has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Leyland Ashok to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Leyland Ashok
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Leyland Ashok does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Low bargaining power of suppliers
– Suppliers of Leyland Ashok in the sector have low bargaining power. Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Leyland Ashok to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Leyland Ashok 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Leyland Ashok 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 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy, is just above the industry average. Leyland Ashok 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy, it seems that the employees of Leyland Ashok 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.
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.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy 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 Leyland Ashok 's lucrative customers.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Leyland Ashok in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Developing new processes and practices
– Leyland Ashok can develop new processes and procedures in Strategy & Execution 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Leyland Ashok 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.
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.
Creating value in data economy
– The success of analytics program of Leyland Ashok has opened avenues for new revenue streams for the organization in the industry. This can help Leyland Ashok to build a more holistic ecosystem as suggested in the Ashok Leyland (A): Reaching For the Stars - Embarking on a New Vision and Strategy case study. Leyland Ashok can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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 Leyland Ashok in the consumer business. Now Leyland Ashok can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Loyalty marketing
– Leyland Ashok 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.
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.
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.
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 -
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.
Increasing wage structure of Leyland Ashok
– 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 Leyland Ashok.
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.
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 Leyland Ashok business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Leyland Ashok has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Leyland Ashok needs to keep up with the evolution of technology in the Strategy & Execution 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 Leyland Ashok.
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.
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.
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.
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 .
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.
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 .
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.
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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