Micromax: Scaling the Largest Indian Mobile Handset Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Micromax: Scaling the Largest Indian Mobile Handset Company
It is January 2014 and Rahul Sharma, cofounder of Micromax Informatics (Micromax), the largest Indian mobile handset company, is preparing for an emergency conference call with his private equity investors. In the last six years, Micromax had grown its annual product revenues from $54M to over $1B. Unfortunately, it was difficult for the founding team to keep up with Micromax's rapid growth, triggering a series of missteps in 2010 that brought the company close to catastrophe. In response, investors had convinced Sharma and his cofounders to hire their first outside CEO, Deepak Mehrotra, and several senior professionals. With the founders working alongside the new "professionals," frequent overlaps and sometimes run-ins occurred. Now, both Mehrotra and the head of their smartphone division had resigned. Sharma evaluates their options: Would the founders need to reconsider their involvement in the company they created? Or was there still a middle ground where both founders and professionals could coexist in the business?
Swot Analysis of "Micromax: Scaling the Largest Indian Mobile Handset Company" written by Ranjay Gulati, Rachna Tahilyani, Alicia DeSantola includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Micromax Sharma facing as an external strategic factors. Some of the topics covered in Micromax: Scaling the Largest Indian Mobile Handset Company case study are - Strategic Management Strategies, Mobile, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Micromax: Scaling the Largest Indian Mobile Handset Company casestudy better are - – technology disruption, there is backlash against globalization, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing commodity prices,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of Micromax: Scaling the Largest Indian Mobile Handset Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Micromax: Scaling the Largest Indian Mobile Handset Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Micromax Sharma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company can be done for the following purposes –
1. Strategic planning using facts provided in Micromax: Scaling the Largest Indian Mobile Handset Company case study
2. Improving business portfolio management of Micromax Sharma
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Micromax Sharma
Strengths Micromax: Scaling the Largest Indian Mobile Handset Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Micromax Sharma in Micromax: Scaling the Largest Indian Mobile Handset Company Harvard Business Review case study are -
Training and development
– Micromax Sharma has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Micromax: Scaling the Largest Indian Mobile Handset Company 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.
Effective Research and Development (R&D)
– Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Micromax Sharma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Micromax Sharma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Micromax Sharma 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Micromax Sharma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Micromax Sharma 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.
Strong track record of project management
– Micromax Sharma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Micromax Sharma 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 Micromax Sharma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Micromax: Scaling the Largest Indian Mobile Handset Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Micromax Sharma 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 Micromax Sharma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Micromax Sharma is present in almost all the verticals within the industry. This has provided firm in Micromax: Scaling the Largest Indian Mobile Handset Company 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.
Cross disciplinary teams
– Horizontal connected teams at the Micromax Sharma 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.
Analytics focus
– Micromax Sharma 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 Ranjay Gulati, Rachna Tahilyani, Alicia DeSantola 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.
Low bargaining power of suppliers
– Suppliers of Micromax Sharma in the sector have low bargaining power. Micromax: Scaling the Largest Indian Mobile Handset Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Micromax Sharma to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Micromax: Scaling the Largest Indian Mobile Handset Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Micromax: Scaling the Largest Indian Mobile Handset Company are -
No frontier risks strategy
– After analyzing the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Lack of clear differentiation of Micromax Sharma products
– To increase the profitability and margins on the products, Micromax Sharma needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Micromax Sharma, firm in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax Sharma has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company, is just above the industry average. Micromax Sharma 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ranjay Gulati, Rachna Tahilyani, Alicia DeSantola suggests that, Micromax Sharma is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company can leverage the sales team experience to cultivate customer relationships as Micromax Sharma is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Micromax Sharma 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.
Slow decision making process
– As mentioned earlier in the report, Micromax Sharma 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. Micromax Sharma 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 Micromax Sharma 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 - Micromax: Scaling the Largest Indian Mobile Handset Company should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Micromax Sharma is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Micromax Sharma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Micromax Sharma to focus more on services rather than just following the product oriented approach.
Opportunities Micromax: Scaling the Largest Indian Mobile Handset Company | 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 Micromax: Scaling the Largest Indian Mobile Handset Company are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Micromax Sharma 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Micromax Sharma can use these opportunities to build new business models that can help the communities that Micromax Sharma operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Micromax Sharma can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Micromax Sharma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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 Micromax Sharma 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Micromax Sharma 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. Micromax Sharma 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.
Using analytics as competitive advantage
– Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Micromax Sharma to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Micromax Sharma can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Micromax Sharma 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Micromax Sharma 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 Micromax Sharma to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Micromax Sharma can develop new processes and procedures in Leadership & Managing People 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.
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 Micromax Sharma in the consumer business. Now Micromax Sharma can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Micromax Sharma to increase its market reach. Micromax Sharma 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.
Threats Micromax: Scaling the Largest Indian Mobile Handset Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company are -
High dependence on third party suppliers
– Micromax Sharma 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
– Micromax Sharma 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.
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 Micromax Sharma business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Micromax Sharma 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 Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Micromax Sharma can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Micromax Sharma.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Micromax Sharma in the Leadership & Managing People industry. The Leadership & Managing People 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.
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. Micromax Sharma needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Micromax Sharma in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Micromax Sharma
– 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 Micromax Sharma.
Shortening product life cycle
– it is one of the major threat that Micromax Sharma is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Micromax Sharma has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Micromax Sharma needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Weighted SWOT Analysis of Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax Sharma needs to make to build a sustainable competitive advantage.