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 - – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing energy prices, geopolitical disruptions, increasing transportation and logistics costs, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, 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 -
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.
Ability to lead change in Global Business field
– Ttk Eva 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 Ttk Eva in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Ttk Eva has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TTK Prestige: Economic Value Added Analysis 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.
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.
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.
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.
Learning organization
- Ttk Eva 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 Ttk Eva is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TTK Prestige: Economic Value Added Analysis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ttk Eva in the sector have low bargaining power. TTK Prestige: Economic Value Added Analysis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ttk Eva to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the TTK Prestige: Economic Value Added Analysis 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.
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.
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 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.
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 -
High cash cycle compare to competitors
Ttk Eva has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TTK Prestige: Economic Value Added Analysis, it seems that the employees of Ttk Eva 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ttk Eva needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Ttk Eva has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, 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.
No frontier risks strategy
– After analyzing the HBR case study TTK Prestige: Economic Value Added Analysis, 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TTK Prestige: Economic Value Added Analysis, in the dynamic environment Ttk Eva has struggled to respond to the nimble upstart competition. Ttk Eva 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 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.
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 -
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ttk Eva 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ttk Eva can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Developing new processes and practices
– Ttk Eva 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.
Leveraging digital technologies
– Ttk Eva 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.
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.
Learning at scale
– Online learning technologies has now opened space for Ttk Eva 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.
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.
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. Ttk Eva 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 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.
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 -
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.
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.
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.
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.
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 Ttk Eva.
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 .
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.
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.
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.
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.
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 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.
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.