Yash Building Centre: Planning for Expansion SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Yash Building Centre: Planning for Expansion
Yash Building Centre, based in Raipur, central India, was in the business of manufacturing fly ash bricks and blocks. At the beginning of 2016, after achieving decent growth and gaining goodwill among local builders and contractors, the managing partner was actively looking to expand business operations into tiles, pavers, and curbstones. He believed this expansion would improve the firm's profitability by allowing it to take full advantage of its reputation among existing customers. It would also enable the firm to increase its size. A key question was, would this decision facilitate value creation for the firm? To make the investment decision, the managing partner needed to consider the return on investment and the capacity at which the new unit would break even. M. Kannadhasan, Vinay Goyal, S.K. Mitra are affiliated with Indian Institute of Management Raipur.
Authors :: M. Kannadhasan, Vinay Goyal, S.K. Mitra
Swot Analysis of "Yash Building Centre: Planning for Expansion" written by M. Kannadhasan, Vinay Goyal, S.K. Mitra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yash Raipur facing as an external strategic factors. Some of the topics covered in Yash Building Centre: Planning for Expansion case study are - Strategic Management Strategies, Budgeting, Financial analysis, Growth strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Yash Building Centre: Planning for Expansion casestudy better are - – increasing transportation and logistics costs, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Yash Building Centre: Planning for Expansion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yash Building Centre: Planning for Expansion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yash Raipur, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yash Raipur 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 Yash Building Centre: Planning for Expansion can be done for the following purposes –
1. Strategic planning using facts provided in Yash Building Centre: Planning for Expansion case study
2. Improving business portfolio management of Yash Raipur
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 Yash Raipur
Strengths Yash Building Centre: Planning for Expansion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yash Raipur in Yash Building Centre: Planning for Expansion Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Yash Raipur 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 Yash Raipur in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Yash Raipur 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 M. Kannadhasan, Vinay Goyal, S.K. Mitra 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Yash Raipur digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yash Raipur 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.
Effective Research and Development (R&D)
– Yash Raipur 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 Yash Building Centre: Planning for Expansion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Yash Raipur is one of the most innovative firm in sector. Manager in Yash Building Centre: Planning for Expansion Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Yash Raipur 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.
Ability to recruit top talent
– Yash Raipur is one of the leading recruiters in the industry. Managers in the Yash Building Centre: Planning for Expansion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Yash Raipur in the sector have low bargaining power. Yash Building Centre: Planning for Expansion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yash Raipur to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Yash Raipur has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yash Raipur 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.
Learning organization
- Yash Raipur 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 Yash Raipur is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Yash Building Centre: Planning for Expansion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Finance & Accounting industry
– Yash Building Centre: Planning for Expansion firm has clearly differentiated products in the market place. This has enabled Yash Raipur to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Yash Raipur to invest into research and development (R&D) and innovation.
Organizational Resilience of Yash Raipur
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yash Raipur does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Yash Building Centre: Planning for Expansion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yash Building Centre: Planning for Expansion are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Yash Building Centre: Planning for Expansion, in the dynamic environment Yash Raipur has struggled to respond to the nimble upstart competition. Yash Raipur has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Yash Raipur has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Yash Raipur products
– To increase the profitability and margins on the products, Yash Raipur needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Yash Raipur supply chain. Even after few cautionary changes mentioned in the HBR case study - Yash Building Centre: Planning for Expansion, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yash Raipur vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Yash Raipur 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. Yash Raipur 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Yash Raipur 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.
Capital Spending Reduction
– Even during the low interest decade, Yash Raipur 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yash Raipur is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Yash Building Centre: Planning for Expansion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Yash Building Centre: Planning for Expansion, it seems that the employees of Yash Raipur 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.
Slow to strategic competitive environment developments
– As Yash Building Centre: Planning for Expansion HBR case study mentions - Yash Raipur 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.
High bargaining power of channel partners
– Because of the regulatory requirements, M. Kannadhasan, Vinay Goyal, S.K. Mitra suggests that, Yash Raipur 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.
Opportunities Yash Building Centre: Planning for Expansion | 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 Yash Building Centre: Planning for Expansion are -
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 Yash Raipur in the consumer business. Now Yash Raipur can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Yash Raipur 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yash Raipur can use these opportunities to build new business models that can help the communities that Yash Raipur operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Yash Raipur can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Yash Building Centre: Planning for Expansion 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.
Using analytics as competitive advantage
– Yash Raipur 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 Yash Building Centre: Planning for Expansion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yash Raipur to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Yash Raipur has opened avenues for new revenue streams for the organization in the industry. This can help Yash Raipur to build a more holistic ecosystem as suggested in the Yash Building Centre: Planning for Expansion case study. Yash Raipur can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yash Raipur 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 Yash Raipur to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yash Raipur in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting 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, Yash Raipur 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, Yash Building Centre: Planning for Expansion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yash Raipur 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.
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. Yash Raipur can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yash Raipur is facing challenges because of the dominance of functional experts in the organization. Yash Building Centre: Planning for Expansion 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.
Better consumer reach
– The expansion of the 5G network will help Yash Raipur to increase its market reach. Yash Raipur 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 Yash Building Centre: Planning for Expansion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yash Building Centre: Planning for Expansion are -
High dependence on third party suppliers
– Yash Raipur 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.
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 Yash Raipur.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Yash Building Centre: Planning for Expansion, Yash Raipur may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
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. Yash Raipur can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Yash Raipur has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Yash Raipur needs to keep up with the evolution of technology in the Finance & Accounting 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.
Environmental challenges
– Yash Raipur 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. Yash Raipur can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Yash Raipur
– 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 Yash Raipur.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yash Raipur 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 Yash Building Centre: Planning for Expansion .
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. Yash Raipur needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Yash Raipur in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Yash Raipur 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yash Raipur 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 Yash Building Centre: Planning for Expansion 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 Yash Building Centre: Planning for Expansion 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 Yash Building Centre: Planning for Expansion 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 Yash Building Centre: Planning for Expansion 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 Yash Building Centre: Planning for Expansion 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 Yash Raipur needs to make to build a sustainable competitive advantage.