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 - – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing household debt because of falling income levels, wage bills are increasing, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings,
increasing transportation and logistics costs, there is increasing trade war between United States & China, 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 -
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.
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.
Superior customer experience
– The customer experience strategy of Yash Raipur in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Operational resilience
– The operational resilience strategy in the Yash Building Centre: Planning for Expansion 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.
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.
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.
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.
Highly skilled collaborators
– Yash Raipur 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 Yash Building Centre: Planning for Expansion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Yash Raipur has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yash Raipur to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 -
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.
No frontier risks strategy
– After analyzing the HBR case study Yash Building Centre: Planning for Expansion, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Yash Raipur is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Yash Raipur needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yash Raipur to focus more on services rather than just following the product oriented approach.
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.
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.
Low market penetration in new markets
– Outside its home market of Yash Raipur, firm in the HBR case study Yash Building Centre: Planning for Expansion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Yash Raipur has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Yash Building Centre: Planning for Expansion, is just above the industry average. Yash Raipur 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.
Skills based hiring
– The stress on hiring functional specialists at Yash Raipur 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.
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.
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 -
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.
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.
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.
Developing new processes and practices
– Yash Raipur can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Yash Raipur 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. Yash Raipur 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 Yash Raipur 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.
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.
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.
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 Yash Raipur 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.
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.
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.
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 -
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.
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 Yash Raipur business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 .
Regulatory challenges
– Yash Raipur 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 Finance & Accounting industry regulations.
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.
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.
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 .
Stagnating economy with rate increase
– Yash Raipur 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Yash Raipur with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
