India: Liberalize in the Face of Crisis? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of India: Liberalize in the Face of Crisis?
In June 1991, India was in the midst of a currency and balance of payments crisis the likes the country had not seen since independence in 1947. The country's foreign exchange reserves were barely enough to finance 13 days worth of imports. In the face of the crisis, India was forced to consider external help from the International Monetary Fund (IMF), which was accompanied by market-oriented conditionalities. The prospect of IMF support was a double-edged sword: on the one hand, restoration of finances and a viable path to economic recovery, but on the other, forced trade liberalization that would upend decades of centralized planning and inward-oriented growth. The IMF's adjustment plan would touch nearly every citizen, firm, and industry in the country. Liberalization, in theory, could stimulate long-term growth in the economy, yet it could also impose substantial adjustment costs in the form of firm closures and job losses. These economic reverberations would undoubtedly shake the country's political establishment, potentially jeopardizing the electoral fortunes of those in power. This case introduces students to Prime Minister P.V. Narasimha Rao's decision to liberalize the Indian economy. Students must pay attention to the domestic political actors-communist and right-wing parties, voter coalitions, and special interest groups-that played a central role in influencing Rao's policy positions. They must also evaluate the negotiation strategies of international institutions, national governments, and firms and industry groups in the context of trade liberalization. By applying political economy theories of trade and economic policymaking to the decision facing Rao, students learn about the complex linkages between domestic political factors and international economic pressures when developing countries integrate into the global economy.
Swot Analysis of "India: Liberalize in the Face of Crisis?" written by Nikhar Gaikwad, Kenneth Scheve includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Liberalization Rao's facing as an external strategic factors. Some of the topics covered in India: Liberalize in the Face of Crisis? case study are - Strategic Management Strategies, Joint ventures, Policy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the India: Liberalize in the Face of Crisis? casestudy better are - – increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of India: Liberalize in the Face of Crisis?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in India: Liberalize in the Face of Crisis? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Liberalization Rao's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Liberalization Rao's 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 India: Liberalize in the Face of Crisis? can be done for the following purposes –
1. Strategic planning using facts provided in India: Liberalize in the Face of Crisis? case study
2. Improving business portfolio management of Liberalization Rao's
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 Liberalization Rao's
Strengths India: Liberalize in the Face of Crisis? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Liberalization Rao's in India: Liberalize in the Face of Crisis? Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Liberalization Rao's 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 Liberalization Rao's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Liberalization Rao's in the sector have low bargaining power. India: Liberalize in the Face of Crisis? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Liberalization Rao's to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Liberalization Rao's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– India: Liberalize in the Face of Crisis? firm has clearly differentiated products in the market place. This has enabled Liberalization Rao's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Liberalization Rao's to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Liberalization Rao's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Liberalization Rao's 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.
Learning organization
- Liberalization Rao's 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 Liberalization Rao's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in India: Liberalize in the Face of Crisis? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Liberalization Rao's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Liberalization Rao's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Liberalization Rao's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Liberalization Rao's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Liberalization Rao's 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 India: Liberalize in the Face of Crisis? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Liberalization Rao's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Liberalization Rao's 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.
High brand equity
– Liberalization Rao's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Liberalization Rao's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses India: Liberalize in the Face of Crisis? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of India: Liberalize in the Face of Crisis? are -
No frontier risks strategy
– After analyzing the HBR case study India: Liberalize in the Face of Crisis?, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Liberalization Rao's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study India: Liberalize in the Face of Crisis? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Liberalization Rao's 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 - India: Liberalize in the Face of Crisis? should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the India: Liberalize in the Face of Crisis? 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 Liberalization Rao's has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Liberalization Rao's 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.
Low market penetration in new markets
– Outside its home market of Liberalization Rao's, firm in the HBR case study India: Liberalize in the Face of Crisis? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Liberalization Rao's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study India: Liberalize in the Face of Crisis?, in the dynamic environment Liberalization Rao's has struggled to respond to the nimble upstart competition. Liberalization Rao's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Liberalization Rao's 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. Liberalization Rao's 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.
Need for greater diversity
– Liberalization Rao's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study India: Liberalize in the Face of Crisis?, it seems that the employees of Liberalization Rao's 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 India: Liberalize in the Face of Crisis? | 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 India: Liberalize in the Face of Crisis? are -
Building a culture of innovation
– managers at Liberalization Rao's 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.
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. Liberalization Rao's 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. Liberalization Rao's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Liberalization Rao's 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.
Better consumer reach
– The expansion of the 5G network will help Liberalization Rao's to increase its market reach. Liberalization Rao's 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.
Using analytics as competitive advantage
– Liberalization Rao's 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 India: Liberalize in the Face of Crisis? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Liberalization Rao's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Liberalization Rao's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Liberalization Rao's 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.
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. Liberalization Rao's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Liberalization Rao's has opened avenues for new revenue streams for the organization in the industry. This can help Liberalization Rao's to build a more holistic ecosystem as suggested in the India: Liberalize in the Face of Crisis? case study. Liberalization Rao's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Liberalization Rao's can use these opportunities to build new business models that can help the communities that Liberalization Rao's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Liberalization Rao's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Liberalization Rao's is facing challenges because of the dominance of functional experts in the organization. India: Liberalize in the Face of Crisis? 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.
Manufacturing automation
– Liberalization Rao's 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.
Threats India: Liberalize in the Face of Crisis? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study India: Liberalize in the Face of Crisis? are -
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. Liberalization Rao's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Liberalization Rao's 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 India: Liberalize in the Face of Crisis?, Liberalization Rao's 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 .
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.
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. Liberalization Rao's 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 Liberalization Rao's.
Shortening product life cycle
– it is one of the major threat that Liberalization Rao's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Liberalization Rao's 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. Liberalization Rao's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Liberalization Rao's business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Liberalization Rao's 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Liberalization Rao's 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 India: Liberalize in the Face of Crisis? .
Increasing wage structure of Liberalization Rao's
– 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 Liberalization Rao's.
Weighted SWOT Analysis of India: Liberalize in the Face of Crisis? 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 India: Liberalize in the Face of Crisis? 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 India: Liberalize in the Face of Crisis? 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 India: Liberalize in the Face of Crisis? 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 India: Liberalize in the Face of Crisis? 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 Liberalization Rao's needs to make to build a sustainable competitive advantage.