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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, 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 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.
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.
Effective Research and Development (R&D)
– Liberalization Rao's 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 India: Liberalize in the Face of Crisis? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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 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.
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.
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.
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.
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 -
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Nikhar Gaikwad, Kenneth Scheve suggests that, Liberalization Rao's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Liberalization Rao's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study India: Liberalize in the Face of Crisis?, is just above the industry average. Liberalization Rao's 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Liberalization Rao's 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.
Aligning sales with marketing
– It come across in the case study India: Liberalize in the Face of Crisis? 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 India: Liberalize in the Face of Crisis? can leverage the sales team experience to cultivate customer relationships as Liberalization Rao's is planning to shift buying processes online.
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.
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.
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.
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 -
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.
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 Liberalization Rao's in the consumer business. Now Liberalization Rao's can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Liberalization Rao's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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.
Leveraging digital technologies
– Liberalization Rao's 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.
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.
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.
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 -
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.
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.
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.
Regulatory challenges
– Liberalization Rao's 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.
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.
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.
Consumer confidence and its impact on Liberalization Rao's 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.
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.
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 .
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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of 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.