Vehbi KoA? and the Making of Turkey's Largest Business Group (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Vehbi KoA? and the Making of Turkey's Largest Business Group (B)
The case builds on the earlier A case which described the origins of the Turkish business group established by Vehbi KoA? before 1988. This case takes the story forward to 2012 as the KoA? group was led by Vehbi's son Rahmi followed by his grandson Mustafa. It explores both the professionalization of the management, and a radical restructuring of the business portfolio as the group refocused on five core sectors. The case also examines the start of the group's globalization strategy which was focused on the white goods affiliate ArA?elik.
Swot Analysis of "Vehbi KoA? and the Making of Turkey's Largest Business Group (B)" written by Asli M. Colpan, Geoffrey G. Jones includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Koa Vehbi facing as an external strategic factors. Some of the topics covered in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) case study are - Strategic Management Strategies, Emerging markets, Entrepreneurship, Globalization, Marketing, Organizational structure, Risk management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Vehbi KoA? and the Making of Turkey's Largest Business Group (B) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, technology disruption, geopolitical disruptions,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Vehbi KoA? and the Making of Turkey's Largest Business Group (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Koa Vehbi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Koa Vehbi 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) can be done for the following purposes –
1. Strategic planning using facts provided in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) case study
2. Improving business portfolio management of Koa Vehbi
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 Koa Vehbi
Strengths Vehbi KoA? and the Making of Turkey's Largest Business Group (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Koa Vehbi in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Koa Vehbi 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.
Operational resilience
– The operational resilience strategy in the Vehbi KoA? and the Making of Turkey's Largest Business Group (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Koa Vehbi 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.
Diverse revenue streams
– Koa Vehbi is present in almost all the verticals within the industry. This has provided firm in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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.
Effective Research and Development (R&D)
– Koa Vehbi 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) - 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
– Koa Vehbi 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 Koa Vehbi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Koa Vehbi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Koa Vehbi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Koa Vehbi 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.
Highly skilled collaborators
– Koa Vehbi 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Koa Vehbi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Vehbi KoA? and the Making of Turkey's Largest Business Group (B) firm has clearly differentiated products in the market place. This has enabled Koa Vehbi to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Koa Vehbi to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Koa Vehbi is one of the leading recruiters in the industry. Managers in the Vehbi KoA? and the Making of Turkey's Largest Business Group (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Vehbi KoA? and the Making of Turkey's Largest Business Group (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vehbi KoA? and the Making of Turkey's Largest Business Group (B) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B), in the dynamic environment Koa Vehbi has struggled to respond to the nimble upstart competition. Koa Vehbi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Koa Vehbi, firm in the HBR case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B), is just above the industry average. Koa Vehbi 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.
Lack of clear differentiation of Koa Vehbi products
– To increase the profitability and margins on the products, Koa Vehbi needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Koa Vehbi 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Koa Vehbi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) can leverage the sales team experience to cultivate customer relationships as Koa Vehbi is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B), 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.
Need for greater diversity
– Koa Vehbi 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.
Slow decision making process
– As mentioned earlier in the report, Koa Vehbi 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. Koa Vehbi 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.
Products dominated business model
– Even though Koa Vehbi 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 - Vehbi KoA? and the Making of Turkey's Largest Business Group (B) should strive to include more intangible value offerings along with its core products and services.
Opportunities Vehbi KoA? and the Making of Turkey's Largest Business Group (B) | 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) are -
Creating value in data economy
– The success of analytics program of Koa Vehbi has opened avenues for new revenue streams for the organization in the industry. This can help Koa Vehbi to build a more holistic ecosystem as suggested in the Vehbi KoA? and the Making of Turkey's Largest Business Group (B) case study. Koa Vehbi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Koa Vehbi 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.
Learning at scale
– Online learning technologies has now opened space for Koa Vehbi 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.
Better consumer reach
– The expansion of the 5G network will help Koa Vehbi to increase its market reach. Koa Vehbi 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.
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 Koa Vehbi 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.
Developing new processes and practices
– Koa Vehbi can develop new processes and procedures in Innovation & Entrepreneurship 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Koa Vehbi is facing challenges because of the dominance of functional experts in the organization. Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Koa Vehbi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Koa Vehbi can use these opportunities to build new business models that can help the communities that Koa Vehbi operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Koa Vehbi 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. Koa Vehbi 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.
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. Koa Vehbi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Koa Vehbi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Koa Vehbi 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.
Threats Vehbi KoA? and the Making of Turkey's Largest Business Group (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B) are -
Regulatory challenges
– Koa Vehbi 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.
Technology acceleration in Forth Industrial Revolution
– Koa Vehbi has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Koa Vehbi 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.
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 Koa Vehbi business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Koa Vehbi 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.
Environmental challenges
– Koa Vehbi 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. Koa Vehbi can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Koa Vehbi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Koa Vehbi
– 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 Koa Vehbi.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Koa Vehbi 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) .
Shortening product life cycle
– it is one of the major threat that Koa Vehbi is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
High dependence on third party suppliers
– Koa Vehbi 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.
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 Koa Vehbi.
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 Koa Vehbi in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Koa Vehbi needs to make to build a sustainable competitive advantage.