Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
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 - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, central banks are concerned over increasing inflation, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, technology disruption,
supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
Organizational Resilience of Daksh Ibm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Daksh Ibm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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.
Diverse revenue streams
– Daksh Ibm is present in almost all the verticals within the industry. This has provided firm in Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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.
High brand equity
– Daksh Ibm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daksh Ibm to keep acquiring new customers and building profitable relationship with both the new and loyal 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.
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.
Effective Research and Development (R&D)
– Daksh Ibm 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
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.
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.
Increasing silos among functional specialists
– The organizational structure of Daksh Ibm is dominated by functional specialists. It is not different from other players in the Global Business segment. Daksh Ibm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daksh Ibm to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daksh Ibm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Interest costs
– Compare to the competition, Daksh Ibm 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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years 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 Daksh Ibm 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Kavita Sethi suggests that, Daksh Ibm 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 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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daksh Ibm can use these opportunities to build new business models that can help the communities that Daksh Ibm operates in. Secondly it can use opportunities from government spending in Global Business sector.
Learning at scale
– Online learning technologies has now opened space for Daksh Ibm 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daksh Ibm 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 Daksh Ibm to hire the very best people irrespective of their geographical location.
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.
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.
Manufacturing automation
– Daksh Ibm 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.
Creating value in data economy
– The success of analytics program of Daksh Ibm has opened avenues for new revenue streams for the organization in the industry. This can help Daksh Ibm to build a more holistic ecosystem as suggested in the Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years case study. Daksh Ibm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Daksh Ibm 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.
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.
Leveraging digital technologies
– Daksh Ibm 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.
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.
Using analytics as competitive advantage
– Daksh Ibm 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 Daksh and IBM: Business Process Transformation in India. Part 2 - The Post Buy-out Years - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daksh Ibm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
Regulatory challenges
– Daksh Ibm 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.
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.
Stagnating economy with rate increase
– Daksh Ibm 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.
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.
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.
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 dependence on third party suppliers
– Daksh Ibm 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.
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.
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.
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.
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. Daksh Ibm 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.
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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