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 - – central banks are concerned over increasing inflation, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing energy prices, wage bills are increasing, increasing household debt because of falling income levels,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, 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 -
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.
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.
High switching costs
– The high switching costs that Gokaldas Hinduja 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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Gokaldas Hinduja 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Gokaldas Exports (A): The Challenge of Change firm has clearly differentiated products in the market place. This has enabled Gokaldas Hinduja to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Gokaldas Hinduja to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Gokaldas Hinduja is one of the most innovative firm in sector. Manager in Gokaldas Exports (A): The Challenge of Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Gokaldas Exports (A): The Challenge of Change Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses 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 -
Skills based hiring
– The stress on hiring functional specialists at Gokaldas Hinduja 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.
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.
Products dominated business model
– Even though Gokaldas Hinduja 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 - Gokaldas Exports (A): The Challenge of Change should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Gokaldas Hinduja 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. Gokaldas Hinduja 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Gokaldas Exports (A): The Challenge of Change, in the dynamic environment Gokaldas Hinduja has struggled to respond to the nimble upstart competition. Gokaldas Hinduja has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Gokaldas Exports (A): The Challenge of Change 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 Gokaldas Hinduja 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Gokaldas Hinduja is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Gokaldas Hinduja needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gokaldas Hinduja to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Gokaldas Hinduja 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.
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 Gokaldas Hinduja supply chain. Even after few cautionary changes mentioned in the HBR case study - Gokaldas Exports (A): The Challenge of Change, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gokaldas Hinduja vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Gokaldas Hinduja 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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gokaldas Hinduja can use these opportunities to build new business models that can help the communities that Gokaldas Hinduja operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Gokaldas Hinduja to increase its market reach. Gokaldas Hinduja 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.
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.
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.
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.
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.
Developing new processes and practices
– Gokaldas Hinduja 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.
Using analytics as competitive advantage
– Gokaldas Hinduja 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 Gokaldas Exports (A): The Challenge of Change - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gokaldas Hinduja to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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 -
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.
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 .
High dependence on third party suppliers
– Gokaldas Hinduja 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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Gokaldas Hinduja is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Gokaldas Hinduja needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Consumer confidence and its impact on Gokaldas Hinduja demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in 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.
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.
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 .
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.
