Case Study Description of AIACA: Interventions for Sustainable Livelihoods
In 2003, the All India Artisans and Craftworkers Welfare Association (AIACA) was launched to explore new and commercially sustainable models of livelihood promotion for India's vulnerable communities of craftworkers. The Indian handlooms and handicrafts, collectively referred to as the craft sector, symbolized the rich historical and cultural diversity that distinguished India from the rest of the world. The sector provided low-cost, "green" livelihood opportunities to millions of Indian families, supplementing their incomes in seasons of agrarian distress, checking migration, and preserving traditional economic relationships. The sector represented the economic lifeline of the most vulnerable sections of Indian society. AIACA took a unique approach towards stakeholder engagement by establishing partnerships with local non-governmental organizations, business enterprises, individual craftworkers, self-help groups, and government agencies. This level of co-operation produced effective advocacy and high-impact developmental work through multiplicative strategies, and the results were scalable and replicable in the context of informal sectors in transitioning economies. AIACA had spent a decade successfully designing and implementing livelihood interventions to help small-scale, family-managed businesses evolve into sustainable enterprises and innovative networks. The organization now needed to re-examine its approach and look for ways to deliver a deeper developmental impact. Sonu Goyal is affiliated with International Management Institute.
Swot Analysis of "AIACA: Interventions for Sustainable Livelihoods" written by Sonu Goyal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aiaca Craftworkers facing as an external strategic factors. Some of the topics covered in AIACA: Interventions for Sustainable Livelihoods case study are - Strategic Management Strategies, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the AIACA: Interventions for Sustainable Livelihoods casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of AIACA: Interventions for Sustainable Livelihoods
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AIACA: Interventions for Sustainable Livelihoods case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aiaca Craftworkers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aiaca Craftworkers 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 AIACA: Interventions for Sustainable Livelihoods can be done for the following purposes –
1. Strategic planning using facts provided in AIACA: Interventions for Sustainable Livelihoods case study
2. Improving business portfolio management of Aiaca Craftworkers
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 Aiaca Craftworkers
Strengths AIACA: Interventions for Sustainable Livelihoods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aiaca Craftworkers in AIACA: Interventions for Sustainable Livelihoods Harvard Business Review case study are -
High switching costs
– The high switching costs that Aiaca Craftworkers 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 Aiaca Craftworkers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Aiaca Craftworkers is one of the most innovative firm in sector. Manager in AIACA: Interventions for Sustainable Livelihoods Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Aiaca Craftworkers is one of the leading recruiters in the industry. Managers in the AIACA: Interventions for Sustainable Livelihoods 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
- Aiaca Craftworkers 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 Aiaca Craftworkers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AIACA: Interventions for Sustainable Livelihoods Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Aiaca Craftworkers 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 Aiaca Craftworkers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Aiaca Craftworkers 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 AIACA: Interventions for Sustainable Livelihoods - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Aiaca Craftworkers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Aiaca Craftworkers in the sector have low bargaining power. AIACA: Interventions for Sustainable Livelihoods has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aiaca Craftworkers to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Aiaca Craftworkers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aiaca Craftworkers 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Aiaca Craftworkers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aiaca Craftworkers 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.
Operational resilience
– The operational resilience strategy in the AIACA: Interventions for Sustainable Livelihoods 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 AIACA: Interventions for Sustainable Livelihoods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AIACA: Interventions for Sustainable Livelihoods are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AIACA: Interventions for Sustainable Livelihoods, in the dynamic environment Aiaca Craftworkers has struggled to respond to the nimble upstart competition. Aiaca Craftworkers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As AIACA: Interventions for Sustainable Livelihoods HBR case study mentions - Aiaca Craftworkers takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study AIACA: Interventions for Sustainable Livelihoods 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 Aiaca Craftworkers 's lucrative customers.
Lack of clear differentiation of Aiaca Craftworkers products
– To increase the profitability and margins on the products, Aiaca Craftworkers needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Aiaca Craftworkers 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.
Slow decision making process
– As mentioned earlier in the report, Aiaca Craftworkers 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. Aiaca Craftworkers 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.
Interest costs
– Compare to the competition, Aiaca Craftworkers 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.
Aligning sales with marketing
– It come across in the case study AIACA: Interventions for Sustainable Livelihoods 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 AIACA: Interventions for Sustainable Livelihoods can leverage the sales team experience to cultivate customer relationships as Aiaca Craftworkers is planning to shift buying processes online.
High cash cycle compare to competitors
Aiaca Craftworkers 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.
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 Aiaca Craftworkers supply chain. Even after few cautionary changes mentioned in the HBR case study - AIACA: Interventions for Sustainable Livelihoods, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aiaca Craftworkers vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AIACA: Interventions for Sustainable Livelihoods, it seems that the employees of Aiaca Craftworkers 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.
Opportunities AIACA: Interventions for Sustainable Livelihoods | 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 AIACA: Interventions for Sustainable Livelihoods are -
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 Aiaca Craftworkers in the consumer business. Now Aiaca Craftworkers can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Aiaca Craftworkers 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aiaca Craftworkers 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.
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. Aiaca Craftworkers 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. Aiaca Craftworkers 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.
Creating value in data economy
– The success of analytics program of Aiaca Craftworkers has opened avenues for new revenue streams for the organization in the industry. This can help Aiaca Craftworkers to build a more holistic ecosystem as suggested in the AIACA: Interventions for Sustainable Livelihoods case study. Aiaca Craftworkers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Aiaca Craftworkers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AIACA: Interventions for Sustainable Livelihoods 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aiaca Craftworkers 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, AIACA: Interventions for Sustainable Livelihoods, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Aiaca Craftworkers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Aiaca Craftworkers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aiaca Craftworkers 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aiaca Craftworkers is facing challenges because of the dominance of functional experts in the organization. AIACA: Interventions for Sustainable Livelihoods 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.
Leveraging digital technologies
– Aiaca Craftworkers 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.
Developing new processes and practices
– Aiaca Craftworkers 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.
Threats AIACA: Interventions for Sustainable Livelihoods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AIACA: Interventions for Sustainable Livelihoods are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aiaca Craftworkers 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 dependence on third party suppliers
– Aiaca Craftworkers 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.
Shortening product life cycle
– it is one of the major threat that Aiaca Craftworkers is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Aiaca Craftworkers 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aiaca Craftworkers 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 AIACA: Interventions for Sustainable Livelihoods .
Consumer confidence and its impact on Aiaca Craftworkers 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. Aiaca Craftworkers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Aiaca Craftworkers has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Aiaca Craftworkers 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aiaca Craftworkers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Aiaca Craftworkers
– 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 Aiaca Craftworkers.
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.
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. Aiaca Craftworkers 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.
Weighted SWOT Analysis of AIACA: Interventions for Sustainable Livelihoods 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 AIACA: Interventions for Sustainable Livelihoods 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 AIACA: Interventions for Sustainable Livelihoods 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 AIACA: Interventions for Sustainable Livelihoods 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 AIACA: Interventions for Sustainable Livelihoods 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 Aiaca Craftworkers needs to make to build a sustainable competitive advantage.
