Case Study Description of TTK Prestige: Economic Value Added Analysis
In 2014, an analyst with a leading investment company wanted to evaluate the financial performance of a kitchen appliances company, TTK Prestige Ltd., headquartered in Bangalore, India. To accomplish this task, the analyst decided to use the economic value added (EVA)-based performance measure, which accorded importance to value creation by management for its shareholders. Recently, there had been a shift away from traditional approaches of measuring shareholder value creation (e.g., earning capitalization and present value of estimated cash flow) towards more value-added approaches like EVA, which offered a more effective method for evaluating financial performance. Varun Dawar is affiliated with Institute of Management Technology, Ghaziabad. Rakesh Arrawatia is affiliated with Institute of Rural Management.
Swot Analysis of "TTK Prestige: Economic Value Added Analysis" written by Varun Dawar, Rakesh Arrawatia, Arit Chaudhury includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ttk Eva facing as an external strategic factors. Some of the topics covered in TTK Prestige: Economic Value Added Analysis case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the TTK Prestige: Economic Value Added Analysis casestudy better are - – increasing commodity prices, wage bills are increasing, increasing energy prices, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of TTK Prestige: Economic Value Added Analysis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TTK Prestige: Economic Value Added Analysis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ttk Eva, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ttk Eva 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 TTK Prestige: Economic Value Added Analysis can be done for the following purposes –
1. Strategic planning using facts provided in TTK Prestige: Economic Value Added Analysis case study
2. Improving business portfolio management of Ttk Eva
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 Ttk Eva
Strengths TTK Prestige: Economic Value Added Analysis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ttk Eva in TTK Prestige: Economic Value Added Analysis Harvard Business Review case study are -
Highly skilled collaborators
– Ttk Eva 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 TTK Prestige: Economic Value Added Analysis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Ttk Eva 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.
Strong track record of project management
– Ttk Eva is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Ttk Eva is present in almost all the verticals within the industry. This has provided firm in TTK Prestige: Economic Value Added Analysis 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ttk Eva digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ttk Eva 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.
Cross disciplinary teams
– Horizontal connected teams at the Ttk Eva 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)
– Ttk Eva 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 TTK Prestige: Economic Value Added Analysis - 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
– Ttk Eva is one of the most innovative firm in sector. Manager in TTK Prestige: Economic Value Added Analysis 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 Global Business industry
– TTK Prestige: Economic Value Added Analysis firm has clearly differentiated products in the market place. This has enabled Ttk Eva to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ttk Eva to invest into research and development (R&D) and innovation.
High brand equity
– Ttk Eva has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ttk Eva to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Ttk Eva in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Ttk Eva has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ttk Eva 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.
Weaknesses TTK Prestige: Economic Value Added Analysis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TTK Prestige: Economic Value Added Analysis are -
Slow decision making process
– As mentioned earlier in the report, Ttk Eva 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. Ttk Eva 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ttk Eva is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TTK Prestige: Economic Value Added Analysis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study TTK Prestige: Economic Value Added Analysis has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ttk Eva 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TTK Prestige: Economic Value Added Analysis, is just above the industry average. Ttk Eva 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.
Interest costs
– Compare to the competition, Ttk Eva 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.
Aligning sales with marketing
– It come across in the case study TTK Prestige: Economic Value Added Analysis that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case TTK Prestige: Economic Value Added Analysis can leverage the sales team experience to cultivate customer relationships as Ttk Eva is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Varun Dawar, Rakesh Arrawatia, Arit Chaudhury suggests that, Ttk Eva 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 Ttk Eva, firm in the HBR case study TTK Prestige: Economic Value Added Analysis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Ttk Eva 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 - TTK Prestige: Economic Value Added Analysis should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the TTK Prestige: Economic Value Added Analysis 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 Ttk Eva has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Ttk Eva is dominated by functional specialists. It is not different from other players in the Global Business segment. Ttk Eva needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ttk Eva to focus more on services rather than just following the product oriented approach.
Opportunities TTK Prestige: Economic Value Added Analysis | 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 TTK Prestige: Economic Value Added Analysis are -
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 Ttk Eva 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ttk Eva 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 Ttk Eva to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Ttk Eva to increase its market reach. Ttk Eva 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ttk Eva is facing challenges because of the dominance of functional experts in the organization. TTK Prestige: Economic Value Added Analysis 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Ttk Eva can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Ttk Eva 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 TTK Prestige: Economic Value Added Analysis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ttk Eva to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ttk Eva 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.
Loyalty marketing
– Ttk Eva has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ttk Eva 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, TTK Prestige: Economic Value Added Analysis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Ttk Eva 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.
Creating value in data economy
– The success of analytics program of Ttk Eva has opened avenues for new revenue streams for the organization in the industry. This can help Ttk Eva to build a more holistic ecosystem as suggested in the TTK Prestige: Economic Value Added Analysis case study. Ttk Eva can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Ttk Eva can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TTK Prestige: Economic Value Added Analysis 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 Ttk Eva in the consumer business. Now Ttk Eva can target international markets with far fewer capital restrictions requirements than the existing system.
Threats TTK Prestige: Economic Value Added Analysis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TTK Prestige: Economic Value Added Analysis are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TTK Prestige: Economic Value Added Analysis, Ttk Eva 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 .
Regulatory challenges
– Ttk Eva 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.
Technology acceleration in Forth Industrial Revolution
– Ttk Eva has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ttk Eva 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
– Ttk Eva 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 Ttk Eva in the Global Business 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 Ttk Eva business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ttk Eva with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ttk Eva 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.
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. Ttk Eva can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Ttk Eva 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.
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. Ttk Eva needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ttk Eva 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 TTK Prestige: Economic Value Added Analysis .
Environmental challenges
– Ttk Eva 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. Ttk Eva can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of TTK Prestige: Economic Value Added Analysis 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 TTK Prestige: Economic Value Added Analysis 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 TTK Prestige: Economic Value Added Analysis 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 TTK Prestige: Economic Value Added Analysis 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 TTK Prestige: Economic Value Added Analysis 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 Ttk Eva needs to make to build a sustainable competitive advantage.
