Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal
A multi-issue 1-on-1 collective bargaining agreement (CBA) negotiation between the Senior Manager of Labor Relations (Monika Schmidt) and the new head of the Astra Workers' Federation (Karim Faizal). Astra Precision is the Indian subsidiary of a German auto company. Recently, when violence erupted over working conditions, Astra went into a lockout and lost $300 million.
Swot Analysis of "Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal" written by Horacio Falcao, Kriti Jain, Heather Grover includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Astra Faizal facing as an external strategic factors. Some of the topics covered in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal case study are - Strategic Management Strategies, Cross-cultural management, Financial markets, Growth strategy, Labor, Leadership, Negotiations and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , wage bills are increasing, cloud computing is disrupting traditional business models,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Astra Faizal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Astra Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal can be done for the following purposes –
1. Strategic planning using facts provided in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal case study
2. Improving business portfolio management of Astra Faizal
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 Astra Faizal
Strengths Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Astra Faizal in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal Harvard Business Review case study are -
High brand equity
– Astra Faizal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Astra Faizal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Astra Faizal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Astra Faizal 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 Astra Faizal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Astra Faizal 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 Astra Faizal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Astra Faizal is present in almost all the verticals within the industry. This has provided firm in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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.
Ability to recruit top talent
– Astra Faizal is one of the leading recruiters in the industry. Managers in the Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Astra Faizal 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 Horacio Falcao, Kriti Jain, Heather Grover 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.
Innovation driven organization
– Astra Faizal is one of the most innovative firm in sector. Manager in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Astra Faizal in the sector have low bargaining power. Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Astra Faizal to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Astra Faizal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Astra Faizal 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.
Training and development
– Astra Faizal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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.
Effective Research and Development (R&D)
– Astra Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal are -
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 Astra Faizal supply chain. Even after few cautionary changes mentioned in the HBR case study - Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Astra Faizal vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Astra Faizal 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 - Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Faizal 's lucrative customers.
High cash cycle compare to competitors
Astra Faizal 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.
Capital Spending Reduction
– Even during the low interest decade, Astra Faizal 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.
No frontier risks strategy
– After analyzing the HBR case study Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal, is just above the industry average. Astra Faizal 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Astra Faizal needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Astra Faizal 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. Astra Faizal 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Faizal has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal, in the dynamic environment Astra Faizal has struggled to respond to the nimble upstart competition. Astra Faizal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal | 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal are -
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. Astra Faizal 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. Astra Faizal 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.
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. Astra Faizal can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Astra Faizal to increase its market reach. Astra Faizal 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 Astra Faizal 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Astra Faizal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Astra Faizal 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 Astra Faizal to hire the very best people irrespective of their geographical location.
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 Astra Faizal in the consumer business. Now Astra Faizal can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Astra Faizal 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.
Leveraging digital technologies
– Astra Faizal 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Astra Faizal 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.
Buying journey improvements
– Astra Faizal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Astra Faizal can use these opportunities to build new business models that can help the communities that Astra Faizal 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 Astra Faizal 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.
Threats Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal are -
Increasing wage structure of Astra Faizal
– 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 Astra Faizal.
Environmental challenges
– Astra Faizal 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. Astra Faizal can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Astra Faizal has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Astra Faizal 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.
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. Astra Faizal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Astra Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal .
Shortening product life cycle
– it is one of the major threat that Astra Faizal is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Astra Faizal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Astra Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal, Astra Faizal 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.
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 Astra Faizal.
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.
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 Astra Faizal in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Precision - Labour Negotiation (A): Confidential Instructions for Karim Faizal 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 Astra Faizal needs to make to build a sustainable competitive advantage.
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