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 transportation and logistics costs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, 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 -
Superior customer experience
– The customer experience strategy of Liberalization Rao's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the India: Liberalize in the Face of Crisis? 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.
Analytics focus
– Liberalization Rao's 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 Nikhar Gaikwad, Kenneth Scheve 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 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.
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.
Ability to recruit top talent
– Liberalization Rao's is one of the leading recruiters in the industry. Managers in the India: Liberalize in the Face of Crisis? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Liberalization Rao's is present in almost all the verticals within the industry. This has provided firm in India: Liberalize in the Face of Crisis? 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
– 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.
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.
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.
Training and development
– Liberalization Rao's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in India: Liberalize in the Face of Crisis? 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.
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 -
Lack of clear differentiation of Liberalization Rao's products
– To increase the profitability and margins on the products, Liberalization Rao's needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
Slow to strategic competitive environment developments
– As India: Liberalize in the Face of Crisis? HBR case study mentions - Liberalization Rao's 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 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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study India: Liberalize in the Face of Crisis? 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 Liberalization Rao's 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Liberalization Rao's 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.
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.
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 Liberalization Rao's supply chain. Even after few cautionary changes mentioned in the HBR case study - India: Liberalize in the Face of Crisis?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Liberalization Rao's vulnerable to further global disruptions in South East Asia.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Liberalization Rao's 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 Liberalization Rao's to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Liberalization Rao's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. India: Liberalize in the Face of Crisis? 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.
Learning at scale
– Online learning technologies has now opened space for Liberalization Rao's 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.
Developing new processes and practices
– Liberalization Rao's 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.
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.
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.
Loyalty marketing
– Liberalization Rao's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Liberalization Rao's 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, India: Liberalize in the Face of Crisis?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 -
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. Liberalization Rao's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Liberalization Rao's 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.
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 .
Technology acceleration in Forth Industrial Revolution
– Liberalization Rao's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Liberalization Rao's 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.
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.
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.
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.
Stagnating economy with rate increase
– Liberalization Rao's 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.
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 Liberalization Rao's in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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? .
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.