Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture
This case deals with how Sonata Software, an Indian software company, sought growth in Western Europe through TUI Infotec, a joint venture (JV) with TUI AG, a leader in travel and tourism in Germany. It provides a vehicle for reflecting on a firm's choice of a JV as a means for entering a new overseas market while building new competencies and buttressing competitive advantage. The case opens in Bangalore in May 2010, with B. Ramaswamy, President and Managing Director of Sonata Software, preparing for a meeting with his management team to review the performance of TUI Infotec. The case traces the history of Sonata from its spinoff from its parent company to the JV design and implementation. This case challenges students to evaluate the advantages and disadvantages of this international JV, and to consider the decision of whether to continue the JV or to dissolve it when the revenue commitments made by TUI AG were set to expire in 2011.
Swot Analysis of "Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture" written by Stephanie Hurt, Vijaya Narapareddy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sonata Tui facing as an external strategic factors. Some of the topics covered in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture case study are - Strategic Management Strategies, Joint ventures and Global Business.
Some of the macro environment factors that can be used to understand the Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing energy prices, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
talent flight as more people leaving formal jobs, wage bills are increasing, etc
Introduction to SWOT Analysis of Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sonata Tui, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sonata Tui 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture can be done for the following purposes –
1. Strategic planning using facts provided in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture case study
2. Improving business portfolio management of Sonata Tui
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sonata Tui
Strengths Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sonata Tui in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture Harvard Business Review case study are -
Highly skilled collaborators
– Sonata Tui 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Sonata Tui is one of the most innovative firm in sector. Manager in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Sonata Tui is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Sonata Tui 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.
Effective Research and Development (R&D)
– Sonata Tui 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Sonata Tui in the sector have low bargaining power. Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sonata Tui to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Sonata Tui has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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.
Superior customer experience
– The customer experience strategy of Sonata Tui in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Sonata Tui 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 Sonata Tui is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Sonata Tui has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sonata Tui 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.
Operational resilience
– The operational resilience strategy in the Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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.
Analytics focus
– Sonata Tui 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 Stephanie Hurt, Vijaya Narapareddy 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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 Sonata Tui has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, it seems that the employees of Sonata Tui 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
– Sonata Tui 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.
No frontier risks strategy
– After analyzing the HBR case study Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Lack of clear differentiation of Sonata Tui products
– To increase the profitability and margins on the products, Sonata Tui needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephanie Hurt, Vijaya Narapareddy suggests that, Sonata Tui 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.
Increasing silos among functional specialists
– The organizational structure of Sonata Tui is dominated by functional specialists. It is not different from other players in the Global Business segment. Sonata Tui needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sonata Tui to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Sonata Tui 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 - Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, is just above the industry average. Sonata Tui 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 Sonata Tui 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, in the dynamic environment Sonata Tui has struggled to respond to the nimble upstart competition. Sonata Tui has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture | 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture are -
Learning at scale
– Online learning technologies has now opened space for Sonata Tui 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.
Building a culture of innovation
– managers at Sonata Tui 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 Global Business segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sonata Tui in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Sonata Tui can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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. Sonata Tui can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Sonata Tui to increase its market reach. Sonata Tui 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.
Using analytics as competitive advantage
– Sonata Tui 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sonata Tui to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sonata Tui can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sonata Tui 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sonata Tui 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 Sonata Tui to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Sonata Tui has opened avenues for new revenue streams for the organization in the industry. This can help Sonata Tui to build a more holistic ecosystem as suggested in the Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture case study. Sonata Tui can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sonata Tui 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, Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sonata Tui 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. Sonata Tui 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.
Threats Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture are -
Technology acceleration in Forth Industrial Revolution
– Sonata Tui has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Sonata Tui needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Sonata Tui 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.
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 Sonata Tui in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Sonata Tui 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 Global Business industry regulations.
High dependence on third party suppliers
– Sonata Tui 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.
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. Sonata Tui 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.
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 Sonata Tui business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sonata Tui can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Sonata Tui.
Environmental challenges
– Sonata Tui 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. Sonata Tui can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, Sonata Tui may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing wage structure of Sonata Tui
– 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 Sonata Tui.
Weighted SWOT Analysis of Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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 Sonata Tui needs to make to build a sustainable competitive advantage.
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