Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
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 - – technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, there is backlash against globalization, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, 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 -
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.
Ability to lead change in Global Business field
– Sonata Tui 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 Sonata Tui in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Sonata Tui digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sonata Tui 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.
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.
Diverse revenue streams
– Sonata Tui is present in almost all the verticals within the industry. This has provided firm in Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
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.
Ability to recruit top talent
– Sonata Tui is one of the leading recruiters in the industry. Managers in the Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Sonata Tui in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 -
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.
Slow decision making process
– As mentioned earlier in the report, Sonata Tui 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. Sonata Tui 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.
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.
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.
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 Sonata Tui supply chain. Even after few cautionary changes mentioned in the HBR case study - Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sonata Tui vulnerable to further global disruptions in South East Asia.
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.
Slow to strategic competitive environment developments
– As Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture HBR case study mentions - Sonata Tui 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.
Interest costs
– Compare to the competition, Sonata Tui 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.
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.
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.
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 -
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.
Buying journey improvements
– Sonata Tui can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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.
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 Sonata Tui in the consumer business. Now Sonata Tui can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
Leveraging digital technologies
– Sonata Tui can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sonata Tui can use these opportunities to build new business models that can help the communities that Sonata Tui operates in. Secondly it can use opportunities from government spending in Global Business sector.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sonata Tui is facing challenges because of the dominance of functional experts in the organization. Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture 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.
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 -
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sonata Tui with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Sonata Tui is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sonata Tui 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 Sonata Software Ltd., India: Building Global Competitive Advantage through an International Joint Venture .
Consumer confidence and its impact on Sonata Tui 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.
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. Sonata Tui needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
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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