The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar
This two-party case is designed to teach negotiation within the context of turnaround management, stakeholder management, change management or public sector negotiation. The negotiation between Sudhir Kumar, Officer on Special Duty to the Minister of Railways, and Gaurav Malik, Chief Engineer, is about how to maximise revenues for the ailing Indian Railways, notably by increasing rolling stock axle loads without compromising safety. The case emphasizes the tension between commercial gains and social needs, but also lends itself to discussions about safety, corruption, government and business in India.
Swot Analysis of "The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar" written by Horacio Falcao, Claudia Zeisberger, Claudia Gehlen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Railways Sudhir facing as an external strategic factors. Some of the topics covered in The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar case study are - Strategic Management Strategies, Crisis management, Ethics, Influence, Negotiations and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Railways Sudhir, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Railways Sudhir 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar can be done for the following purposes –
1. Strategic planning using facts provided in The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar case study
2. Improving business portfolio management of Railways Sudhir
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 Railways Sudhir
Strengths The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Railways Sudhir in The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar Harvard Business Review case study are -
Ability to recruit top talent
– Railways Sudhir is one of the leading recruiters in the industry. Managers in the The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Railways Sudhir in the sector have low bargaining power. The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Railways Sudhir to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Railways Sudhir is present in almost all the verticals within the industry. This has provided firm in The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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.
Effective Research and Development (R&D)
– Railways Sudhir 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Railways Sudhir in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Railways Sudhir 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.
Operational resilience
– The operational resilience strategy in the The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar firm has clearly differentiated products in the market place. This has enabled Railways Sudhir to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Railways Sudhir to invest into research and development (R&D) and innovation.
Innovation driven organization
– Railways Sudhir is one of the most innovative firm in sector. Manager in The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Railways Sudhir
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Railways Sudhir does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Railways Sudhir 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Railways Sudhir digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Railways Sudhir 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.
Weaknesses The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar are -
Low market penetration in new markets
– Outside its home market of Railways Sudhir, firm in the HBR case study The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar, in the dynamic environment Railways Sudhir has struggled to respond to the nimble upstart competition. Railways Sudhir has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Railways Sudhir 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.
High cash cycle compare to competitors
Railways Sudhir 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.
Lack of clear differentiation of Railways Sudhir products
– To increase the profitability and margins on the products, Railways Sudhir needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar, is just above the industry average. Railways Sudhir 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Railways Sudhir is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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 Railways Sudhir 's lucrative customers.
Slow to strategic competitive environment developments
– As The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar HBR case study mentions - Railways Sudhir 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.
Skills based hiring
– The stress on hiring functional specialists at Railways Sudhir 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.
Need for greater diversity
– Railways Sudhir 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.
Opportunities The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar | 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar are -
Better consumer reach
– The expansion of the 5G network will help Railways Sudhir to increase its market reach. Railways Sudhir 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Railways Sudhir 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, The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Railways Sudhir 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Railways Sudhir can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Railways Sudhir 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.
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. Railways Sudhir 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. Railways Sudhir 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.
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 Railways Sudhir in the consumer business. Now Railways Sudhir can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Railways Sudhir 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 Railways Sudhir to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Railways Sudhir 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.
Loyalty marketing
– Railways Sudhir 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.
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. Railways Sudhir 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, Railways Sudhir 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.
Learning at scale
– Online learning technologies has now opened space for Railways Sudhir 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.
Threats The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar are -
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 Railways Sudhir 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 Railways Sudhir 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.
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 acceleration in Forth Industrial Revolution
– Railways Sudhir has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Railways Sudhir 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.
Regulatory challenges
– Railways Sudhir 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.
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. Railways Sudhir can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Railways Sudhir 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
– Railways Sudhir 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. Railways Sudhir can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Railways Sudhir.
High dependence on third party suppliers
– Railways Sudhir 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.
Consumer confidence and its impact on Railways Sudhir 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Railways Sudhir 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Railways Sudhir with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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 The Indian Railways 'Cash Cow' - Over or Extra Loading? (A): Confidential Instructions for Sudhir Kumar 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 Railways Sudhir needs to make to build a sustainable competitive advantage.
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