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 - – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
there is backlash against globalization, wage bills are increasing, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
Analytics focus
– Gokaldas Hinduja is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Nicholas Bloom, John Van Reenen, Sheila Melvin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
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 -
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.
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.
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 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Gokaldas Exports (A): The Challenge of Change, is just above the industry average. Gokaldas Hinduja 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.
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.
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 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.
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.
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.
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.
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 -
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gokaldas Hinduja can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gokaldas Hinduja 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 Gokaldas Hinduja to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Gokaldas Hinduja 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 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.
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.
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.
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.
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.
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 .
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.
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.
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.
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.