Case Study Description of Headstart Industries Ltd.: Corporate Culture and Strategy
In August 2011, the newly hired chief executive officer of the Indian firm Headstart Industries Ltd. (HIL) faced a dilemma over whether or not to allot funds for a new project of a business unit that had poor performance over several years and had affected the company's overall profitability. The chief executive officer was faced with a tough choice between acting against the dominant culture of HIL by refusing to fund the new project or displeasing the board members who had hired him to bring about organizational change. He was well aware of the board members' belief that the division in question was a burden on HIL's resources and should be closed down. Should he appease the culture, or should he accept the risks and approve the funding? Abhinav Gupta is affiliated with University of Washington. Thinley Tharchen is affiliated with Pennsylvania State University.
Swot Analysis of "Headstart Industries Ltd.: Corporate Culture and Strategy" written by Abhinav Gupta, Thinley Tharchen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hil Headstart facing as an external strategic factors. Some of the topics covered in Headstart Industries Ltd.: Corporate Culture and Strategy case study are - Strategic Management Strategies, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Headstart Industries Ltd.: Corporate Culture and Strategy casestudy better are - – increasing energy prices, technology disruption, wage bills are increasing, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic ,
increasing commodity prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Headstart Industries Ltd.: Corporate Culture and Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Headstart Industries Ltd.: Corporate Culture and Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hil Headstart, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hil Headstart 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 Headstart Industries Ltd.: Corporate Culture and Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Headstart Industries Ltd.: Corporate Culture and Strategy case study
2. Improving business portfolio management of Hil Headstart
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 Hil Headstart
Strengths Headstart Industries Ltd.: Corporate Culture and Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hil Headstart in Headstart Industries Ltd.: Corporate Culture and Strategy Harvard Business Review case study are -
Effective Research and Development (R&D)
– Hil Headstart 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 Headstart Industries Ltd.: Corporate Culture and Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Hil Headstart in the sector have low bargaining power. Headstart Industries Ltd.: Corporate Culture and Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hil Headstart to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Hil Headstart has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hil Headstart 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.
Superior customer experience
– The customer experience strategy of Hil Headstart in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Hil Headstart is present in almost all the verticals within the industry. This has provided firm in Headstart Industries Ltd.: Corporate Culture and Strategy 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.
Highly skilled collaborators
– Hil Headstart 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 Headstart Industries Ltd.: Corporate Culture and Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Hil Headstart 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 Abhinav Gupta, Thinley Tharchen 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.
Learning organization
- Hil Headstart 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 Hil Headstart is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Headstart Industries Ltd.: Corporate Culture and Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Hil Headstart 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 Hil Headstart in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Hil Headstart is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Hil Headstart digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hil Headstart 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Headstart Industries Ltd.: Corporate Culture and Strategy firm has clearly differentiated products in the market place. This has enabled Hil Headstart to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Hil Headstart to invest into research and development (R&D) and innovation.
Weaknesses Headstart Industries Ltd.: Corporate Culture and Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Headstart Industries Ltd.: Corporate Culture and Strategy are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Headstart Industries Ltd.: Corporate Culture and Strategy 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 Hil Headstart has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Headstart Industries Ltd.: Corporate Culture and Strategy 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 Headstart Industries Ltd.: Corporate Culture and Strategy can leverage the sales team experience to cultivate customer relationships as Hil Headstart is planning to shift buying processes online.
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 Hil Headstart supply chain. Even after few cautionary changes mentioned in the HBR case study - Headstart Industries Ltd.: Corporate Culture and Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hil Headstart vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Hil Headstart has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Hil Headstart, firm in the HBR case study Headstart Industries Ltd.: Corporate Culture and Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Hil Headstart 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.
Products dominated business model
– Even though Hil Headstart 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 - Headstart Industries Ltd.: Corporate Culture and Strategy should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Headstart Industries Ltd.: Corporate Culture and Strategy, it seems that the employees of Hil Headstart 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.
Lack of clear differentiation of Hil Headstart products
– To increase the profitability and margins on the products, Hil Headstart needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Headstart Industries Ltd.: Corporate Culture and Strategy, is just above the industry average. Hil Headstart 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Headstart Industries Ltd.: Corporate Culture and Strategy, in the dynamic environment Hil Headstart has struggled to respond to the nimble upstart competition. Hil Headstart has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Headstart Industries Ltd.: Corporate Culture and Strategy | 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 Headstart Industries Ltd.: Corporate Culture and Strategy are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hil Headstart is facing challenges because of the dominance of functional experts in the organization. Headstart Industries Ltd.: Corporate Culture and Strategy 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.
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 Hil Headstart 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hil Headstart 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.
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 Hil Headstart in the consumer business. Now Hil Headstart can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Hil Headstart can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Headstart Industries Ltd.: Corporate Culture and Strategy 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.
Developing new processes and practices
– Hil Headstart 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hil Headstart 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, Headstart Industries Ltd.: Corporate Culture and Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Hil Headstart 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hil Headstart can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Hil Headstart 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 Leadership & Managing People segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hil Headstart 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hil Headstart can use these opportunities to build new business models that can help the communities that Hil Headstart operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Hil Headstart can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Headstart Industries Ltd.: Corporate Culture and Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Headstart Industries Ltd.: Corporate Culture and Strategy are -
Environmental challenges
– Hil Headstart 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. Hil Headstart can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Hil Headstart 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 Leadership & Managing People industry regulations.
Increasing wage structure of Hil Headstart
– 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 Hil Headstart.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hil Headstart with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Headstart Industries Ltd.: Corporate Culture and Strategy, Hil Headstart may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Hil Headstart in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Hil Headstart is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Hil Headstart can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Hil Headstart 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.
Stagnating economy with rate increase
– Hil Headstart 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.
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.
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 Hil Headstart business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hil Headstart 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 Headstart Industries Ltd.: Corporate Culture and Strategy .
Weighted SWOT Analysis of Headstart Industries Ltd.: Corporate Culture and Strategy 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 Headstart Industries Ltd.: Corporate Culture and Strategy 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 Headstart Industries Ltd.: Corporate Culture and Strategy 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 Headstart Industries Ltd.: Corporate Culture and Strategy 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 Headstart Industries Ltd.: Corporate Culture and Strategy 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 Hil Headstart needs to make to build a sustainable competitive advantage.