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 - – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, geopolitical disruptions, 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 -
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.
Ability to lead change in Innovation & Entrepreneurship field
– Koa Vehbi 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 Koa Vehbi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
Learning organization
- Koa Vehbi 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 Koa Vehbi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Vehbi KoA? and the Making of Turkey's Largest Business Group (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Koa Vehbi in the sector have low bargaining power. Vehbi KoA? and the Making of Turkey's Largest Business Group (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Koa Vehbi to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Koa Vehbi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Koa Vehbi 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.
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.
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 -
Interest costs
– Compare to the competition, Koa Vehbi 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Vehbi KoA? and the Making of Turkey's Largest Business Group (B), it seems that the employees of Koa Vehbi 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.
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.
Increasing silos among functional specialists
– The organizational structure of Koa Vehbi is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Koa Vehbi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Koa Vehbi to focus more on services rather than just following the product oriented approach.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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 Koa Vehbi has relatively successful track record of launching new products.
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 Koa Vehbi supply chain. Even after few cautionary changes mentioned in the HBR case study - Vehbi KoA? and the Making of Turkey's Largest Business Group (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Koa Vehbi vulnerable to further global disruptions in South East Asia.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Koa Vehbi 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.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Koa Vehbi 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 Koa Vehbi to hire the very best people irrespective of their geographical location.
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.
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.
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 Koa Vehbi in the consumer business. Now Koa Vehbi can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Koa Vehbi 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.
Manufacturing automation
– Koa Vehbi 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.
Using analytics as competitive advantage
– Koa Vehbi 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 Vehbi KoA? and the Making of Turkey's Largest Business Group (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Koa Vehbi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Koa Vehbi 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.
Buying journey improvements
– Koa Vehbi can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Vehbi KoA? and the Making of Turkey's Largest Business Group (B) 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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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. Koa Vehbi needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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. Koa Vehbi 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Koa Vehbi 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.
Consumer confidence and its impact on Koa Vehbi 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.
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.
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.