Case Study Description of Joneja Bright Steels: The Cash Discount Decision
Joneja Bright Steels Private Limited (JBS) was one of many major players in India's bright steel industry, serving almost every automobile manufacturer in Northern India. After the business launched in 2002, the automobile market expanded, leading JBS to an early strong position. But in fiscal year 2014/15, the company experienced working capital management issues. JBS considered using credit policies as a way of improving profitability-shifting from a strict credit policy of net 45 days to a flexible credit policy with a 2 per cent discount for accounts paid within 10 days (2/10 net 45 days). Should JBS implement a cash discount for fiscal year 2016/17? The discount could potentially increase the burden caused by already declining sales, but could also improve the company's cash position. The authors are affiliated with Indian Institute of Management Raipur.
Swot Analysis of "Joneja Bright Steels: The Cash Discount Decision" written by Surya Bhushan Kumar, Vinay Goyal, S.K. Mitra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jbs Discount facing as an external strategic factors. Some of the topics covered in Joneja Bright Steels: The Cash Discount Decision case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Joneja Bright Steels: The Cash Discount Decision casestudy better are - – increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, technology disruption, geopolitical disruptions, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Joneja Bright Steels: The Cash Discount Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Joneja Bright Steels: The Cash Discount Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jbs Discount, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jbs Discount 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 Joneja Bright Steels: The Cash Discount Decision can be done for the following purposes –
1. Strategic planning using facts provided in Joneja Bright Steels: The Cash Discount Decision case study
2. Improving business portfolio management of Jbs Discount
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 Jbs Discount
Strengths Joneja Bright Steels: The Cash Discount Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jbs Discount in Joneja Bright Steels: The Cash Discount Decision Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Jbs Discount in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Jbs Discount is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Joneja Bright Steels: The Cash Discount Decision 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.
Diverse revenue streams
– Jbs Discount is present in almost all the verticals within the industry. This has provided firm in Joneja Bright Steels: The Cash Discount Decision 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
– Jbs Discount 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 Surya Bhushan Kumar, Vinay Goyal, S.K. Mitra can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Jbs Discount
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jbs Discount does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Joneja Bright Steels: The Cash Discount Decision firm has clearly differentiated products in the market place. This has enabled Jbs Discount to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Jbs Discount to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Jbs Discount 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 Joneja Bright Steels: The Cash Discount Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Jbs Discount is one of the leading recruiters in the industry. Managers in the Joneja Bright Steels: The Cash Discount Decision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Jbs Discount is one of the most innovative firm in sector. Manager in Joneja Bright Steels: The Cash Discount Decision Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Jbs Discount 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 Joneja Bright Steels: The Cash Discount Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Jbs Discount has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Joneja Bright Steels: The Cash Discount Decision 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.
Weaknesses Joneja Bright Steels: The Cash Discount Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Joneja Bright Steels: The Cash Discount Decision are -
Skills based hiring
– The stress on hiring functional specialists at Jbs Discount 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Joneja Bright Steels: The Cash Discount Decision 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 Jbs Discount has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Joneja Bright Steels: The Cash Discount Decision, is just above the industry average. Jbs Discount 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jbs Discount is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Joneja Bright Steels: The Cash Discount Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Jbs Discount 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Joneja Bright Steels: The Cash Discount Decision 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 Jbs Discount 's lucrative customers.
Products dominated business model
– Even though Jbs Discount 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 - Joneja Bright Steels: The Cash Discount Decision should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Jbs Discount 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.
Need for greater diversity
– Jbs Discount 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.
Lack of clear differentiation of Jbs Discount products
– To increase the profitability and margins on the products, Jbs Discount 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, Surya Bhushan Kumar, Vinay Goyal, S.K. Mitra suggests that, Jbs Discount 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.
Opportunities Joneja Bright Steels: The Cash Discount Decision | 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 Joneja Bright Steels: The Cash Discount Decision are -
Manufacturing automation
– Jbs Discount can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Jbs Discount 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.
Learning at scale
– Online learning technologies has now opened space for Jbs Discount to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jbs Discount is facing challenges because of the dominance of functional experts in the organization. Joneja Bright Steels: The Cash Discount Decision 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.
Better consumer reach
– The expansion of the 5G network will help Jbs Discount to increase its market reach. Jbs Discount 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jbs Discount 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.
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. Jbs Discount can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Jbs Discount can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Joneja Bright Steels: The Cash Discount Decision 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.
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 Jbs Discount 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.
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. Jbs Discount 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. Jbs Discount 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.
Leveraging digital technologies
– Jbs Discount 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jbs Discount 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, Joneja Bright Steels: The Cash Discount Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Jbs Discount 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 Joneja Bright Steels: The Cash Discount Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jbs Discount to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Joneja Bright Steels: The Cash Discount Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Joneja Bright Steels: The Cash Discount Decision are -
Stagnating economy with rate increase
– Jbs Discount 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.
Shortening product life cycle
– it is one of the major threat that Jbs Discount is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Jbs Discount 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. Jbs Discount can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Jbs Discount.
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 Jbs Discount business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Jbs Discount 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.
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 Jbs Discount in the Global Business sector and impact the bottomline of the organization.
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. Jbs Discount 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 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.
Consumer confidence and its impact on Jbs Discount 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.
Technology acceleration in Forth Industrial Revolution
– Jbs Discount has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Jbs Discount 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
– Jbs Discount 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.
Increasing wage structure of Jbs Discount
– 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 Jbs Discount.
Weighted SWOT Analysis of Joneja Bright Steels: The Cash Discount Decision 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 Joneja Bright Steels: The Cash Discount Decision 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 Joneja Bright Steels: The Cash Discount Decision 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 Joneja Bright Steels: The Cash Discount Decision 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 Joneja Bright Steels: The Cash Discount Decision 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 Jbs Discount needs to make to build a sustainable competitive advantage.
