Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years
The story of Daksh, one of India's leading BPO companies that was bought out by IBM in April 2004 at an estimated amount of US$170 million, had all the elements of the great Indian IT dream: entrepreneurship, innovation, venture capital, wealth creation and a quick exit. Elaborating the post buy-out scenario the case highlights various issues arising from mergers and acquisitions and throws throws open for discussion different aspects of the dynamics of acquisition integration. The case also addresses the question as to why the soon-to-go-public Daksh had agreed to a sell-out and, more importantly, what had prompted IBM to acquire Daksh. Students are challenged to evaluate whether or not the takeover was the right decision, and how it fit into IBM's overall strategy. The case can either be used independently or in conjunction with Daksh and IBM: Business Process Outsourcing in India - Part 1. The Formative Years, which looks at Daksh as a fast growth entrepreneurial venture.
Swot Analysis of "Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years" written by Ali Farhoomand, Kavita Sethi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Daksh Ibm facing as an external strategic factors. Some of the topics covered in Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years case study are - Strategic Management Strategies, Data, Emerging markets, Entrepreneurial finance, Growth strategy, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing commodity prices, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daksh Ibm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daksh Ibm 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years can be done for the following purposes –
1. Strategic planning using facts provided in Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years case study
2. Improving business portfolio management of Daksh Ibm
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 Daksh Ibm
Strengths Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daksh Ibm in Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years Harvard Business Review case study are -
Ability to lead change in Global Business field
– Daksh Ibm 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 Daksh Ibm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Daksh Ibm 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Daksh Ibm 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
– Daksh Ibm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years firm has clearly differentiated products in the market place. This has enabled Daksh Ibm to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Daksh Ibm to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Daksh Ibm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daksh Ibm 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.
Ability to recruit top talent
– Daksh Ibm is one of the leading recruiters in the industry. Managers in the Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Daksh Ibm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daksh Ibm 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.
Analytics focus
– Daksh Ibm 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 Ali Farhoomand, Kavita Sethi 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.
Cross disciplinary teams
– Horizontal connected teams at the Daksh Ibm 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.
High switching costs
– The high switching costs that Daksh Ibm 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.
Operational resilience
– The operational resilience strategy in the Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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.
Weaknesses Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years are -
Lack of clear differentiation of Daksh Ibm products
– To increase the profitability and margins on the products, Daksh Ibm needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Daksh Ibm 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. Daksh Ibm 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.
High cash cycle compare to competitors
Daksh Ibm 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.
Slow to strategic competitive environment developments
– As Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years HBR case study mentions - Daksh Ibm 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.
Need for greater diversity
– Daksh Ibm 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.
Low market penetration in new markets
– Outside its home market of Daksh Ibm, firm in the HBR case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years, in the dynamic environment Daksh Ibm has struggled to respond to the nimble upstart competition. Daksh Ibm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years, is just above the industry average. Daksh Ibm 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.
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 Daksh Ibm supply chain. Even after few cautionary changes mentioned in the HBR case study - Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daksh Ibm vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh Ibm has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years can leverage the sales team experience to cultivate customer relationships as Daksh Ibm is planning to shift buying processes online.
Opportunities Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years | 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Daksh Ibm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Daksh Ibm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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.
Developing new processes and practices
– Daksh Ibm can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Daksh Ibm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daksh Ibm 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, Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years, 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 Daksh Ibm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daksh Ibm is facing challenges because of the dominance of functional experts in the organization. Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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.
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 Daksh Ibm 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.
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. Daksh Ibm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Daksh Ibm 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. Daksh Ibm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daksh Ibm 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Daksh Ibm 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.
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 Daksh Ibm in the consumer business. Now Daksh Ibm can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years are -
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 Daksh Ibm in the Global Business sector and impact the bottomline of the organization.
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. Daksh Ibm needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daksh Ibm 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daksh Ibm in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Daksh Ibm 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.
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. Daksh Ibm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years, Daksh Ibm 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 .
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 Daksh Ibm business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Daksh Ibm 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. Daksh Ibm can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Daksh Ibm has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Daksh Ibm 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.
Increasing wage structure of Daksh Ibm
– 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 Daksh Ibm.
Shortening product life cycle
– it is one of the major threat that Daksh Ibm is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh Ibm needs to make to build a sustainable competitive advantage.
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