Gokaldas Exports (A): The Challenge of Change SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gokaldas Exports (A): The Challenge of Change
Gokaldas Exports was a family-owned business founded in 1979 that had grown into India's largest apparel exporter by the mid 2000s. Its founder, Jhamandas H. Hinduja, had bequeathed control of the company to three sons, each of whom brought in his own son. By the end of 2004, Gokaldas had 43 factories with 258 production lines scattered in and around the southern India city of Bangalore. It had more than 35,000 workers, which was nearly double the number it employed in 1999- 2000, and its total sales had increased at an annual compounded growth rate of 19.67 percent over this period. The company was valued at approximately $215 million and exported nearly 90 percent of its production. However, to maintain its already slim margins in an increasingly competitive environment, Gokaldas needed to become more efficient. Company leaders hoped to improve profits by 10-15 percent without adding resources and Gaurav Hinduja, COO of the sportswear division and a third generation family member, became convinced that Lean would be the best means to make this happen.
Authors :: Nicholas Bloom, John Van Reenen, Sheila Melvin
Swot Analysis of "Gokaldas Exports (A): The Challenge of Change" written by Nicholas Bloom, John Van Reenen, Sheila Melvin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gokaldas Hinduja facing as an external strategic factors. Some of the topics covered in Gokaldas Exports (A): The Challenge of Change case study are - Strategic Management Strategies, Innovation, Productivity and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Gokaldas Exports (A): The Challenge of Change casestudy better are - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Gokaldas Exports (A): The Challenge of Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gokaldas Exports (A): The Challenge of Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gokaldas Hinduja, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change can be done for the following purposes –
1. Strategic planning using facts provided in Gokaldas Exports (A): The Challenge of Change case study
2. Improving business portfolio management of Gokaldas Hinduja
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gokaldas Hinduja
Strengths Gokaldas Exports (A): The Challenge of Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gokaldas Hinduja in Gokaldas Exports (A): The Challenge of Change Harvard Business Review case study are -
High brand equity
– Gokaldas Hinduja has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gokaldas Hinduja to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Gokaldas Hinduja 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 Gokaldas Hinduja in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Gokaldas Hinduja is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Gokaldas Hinduja
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gokaldas Hinduja does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Gokaldas Hinduja in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Gokaldas Hinduja is present in almost all the verticals within the industry. This has provided firm in Gokaldas Exports (A): The Challenge of Change 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.
Learning organization
- Gokaldas Hinduja 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 Gokaldas Hinduja is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gokaldas Exports (A): The Challenge of Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Gokaldas Hinduja digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gokaldas Hinduja 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
– Gokaldas Hinduja is one of the leading recruiters in the industry. Managers in the Gokaldas Exports (A): The Challenge of Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Gokaldas Hinduja has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gokaldas Hinduja 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.
Low bargaining power of suppliers
– Suppliers of Gokaldas Hinduja in the sector have low bargaining power. Gokaldas Exports (A): The Challenge of Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gokaldas Hinduja to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Gokaldas Exports (A): The Challenge of Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gokaldas Exports (A): The Challenge of Change are -
High bargaining power of channel partners
– Because of the regulatory requirements, Nicholas Bloom, John Van Reenen, Sheila Melvin suggests that, Gokaldas Hinduja 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.
Aligning sales with marketing
– It come across in the case study Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Exports (A): The Challenge of Change can leverage the sales team experience to cultivate customer relationships as Gokaldas Hinduja is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gokaldas Hinduja is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Exports (A): The Challenge of Change, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gokaldas Hinduja 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 to strategic competitive environment developments
– As Gokaldas Exports (A): The Challenge of Change HBR case study mentions - Gokaldas Hinduja 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Hinduja has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Gokaldas Hinduja 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.
Low market penetration in new markets
– Outside its home market of Gokaldas Hinduja, firm in the HBR case study Gokaldas Exports (A): The Challenge of Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change, it seems that the employees of Gokaldas Hinduja 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.
Opportunities Gokaldas Exports (A): The Challenge of Change | 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 Gokaldas Exports (A): The Challenge of Change are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Gokaldas Hinduja 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.
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 Gokaldas Hinduja 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
– Gokaldas Hinduja can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Leveraging digital technologies
– Gokaldas Hinduja 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.
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 Gokaldas Hinduja in the consumer business. Now Gokaldas Hinduja can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gokaldas Hinduja 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, Gokaldas Exports (A): The Challenge of Change, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gokaldas Hinduja is facing challenges because of the dominance of functional experts in the organization. Gokaldas Exports (A): The Challenge of Change 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gokaldas Hinduja 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. Gokaldas Hinduja 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.
Building a culture of innovation
– managers at Gokaldas Hinduja 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 Innovation & Entrepreneurship segment.
Buying journey improvements
– Gokaldas Hinduja can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gokaldas Exports (A): The Challenge of Change 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.
Learning at scale
– Online learning technologies has now opened space for Gokaldas Hinduja 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.
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. Gokaldas Hinduja can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gokaldas Hinduja in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Threats Gokaldas Exports (A): The Challenge of Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gokaldas Exports (A): The Challenge of Change are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change .
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. Gokaldas Hinduja 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gokaldas Hinduja in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Increasing wage structure of Gokaldas Hinduja
– 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 Gokaldas Hinduja.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change, Gokaldas Hinduja may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Gokaldas Hinduja.
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.
Technology acceleration in Forth Industrial Revolution
– Gokaldas Hinduja has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Gokaldas Hinduja needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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 Gokaldas Hinduja in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Gokaldas Hinduja 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 Innovation & Entrepreneurship industry regulations.
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 Gokaldas Hinduja business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Gokaldas Hinduja 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. Gokaldas Hinduja can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Hinduja needs to make to build a sustainable competitive advantage.