Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A)
This case presents a role play between a buyer, seller and consultant. In January 2012, India Steel Ltd., a successful, family-owned, mid-sized steel manufacturing company headquartered in India but with agents in Europe, the United States and some parts of the Middle East, is about to enter into a negotiation to buy a steel plant owned by Swedish Steel AB, a large Swedish steel company with more than 7,000 employees working in nine production facilities all over the world. Encouraged by a family friend, India Steel's CEO has hired an Indian consulting firm to go to Sweden and evaluate the offer.This case involves the buyer and is used with Indian Steel Ltd.: Tri-Party Negotiation - The Seller (B) and Indian Steel Ltd.: Tri-Party Negotiation - The Consultant (C). Authors Samish Dalal and Rajiv Agarwal are affiliated with SP Jain Institute of Management & Research.
Swot Analysis of "Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A)" written by Samish Dalal, Agarwal Rajiv includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Steel Tri facing as an external strategic factors. Some of the topics covered in Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) case study are - Strategic Management Strategies, Leadership and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) casestudy better are - – talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
geopolitical disruptions, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Steel Tri, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Steel Tri 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) can be done for the following purposes –
1. Strategic planning using facts provided in Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) case study
2. Improving business portfolio management of Steel Tri
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 Steel Tri
Strengths Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Steel Tri in Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Steel Tri 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 Steel Tri in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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.
High switching costs
– The high switching costs that Steel Tri 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Steel Tri digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Steel Tri 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.
High brand equity
– Steel Tri has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Steel Tri to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Steel Tri is present in almost all the verticals within the industry. This has provided firm in Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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.
Strong track record of project management
– Steel Tri is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) firm has clearly differentiated products in the market place. This has enabled Steel Tri to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Steel Tri to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Steel Tri in the sector have low bargaining power. Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Steel Tri to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Steel Tri 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.
Highly skilled collaborators
– Steel Tri 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Steel Tri has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) are -
No frontier risks strategy
– After analyzing the HBR case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A), 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.
Skills based hiring
– The stress on hiring functional specialists at Steel Tri 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.
Lack of clear differentiation of Steel Tri products
– To increase the profitability and margins on the products, Steel Tri needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) can leverage the sales team experience to cultivate customer relationships as Steel Tri is planning to shift buying processes online.
Interest costs
– Compare to the competition, Steel Tri 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 operating costs
– Compare to the competitors, firm in the HBR case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Steel Tri 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Steel Tri is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Steel Tri needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Steel Tri to focus more on services rather than just following the product oriented approach.
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 Steel Tri supply chain. Even after few cautionary changes mentioned in the HBR case study - Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Steel Tri vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Samish Dalal, Agarwal Rajiv suggests that, Steel Tri 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.
Slow decision making process
– As mentioned earlier in the report, Steel Tri 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. Steel Tri 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Steel Tri is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) | 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Steel Tri can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Steel Tri 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Steel Tri 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Steel Tri can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Steel Tri 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.
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. Steel Tri 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. Steel Tri 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.
Using analytics as competitive advantage
– Steel Tri has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Steel Tri to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Steel Tri is facing challenges because of the dominance of functional experts in the organization. Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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.
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. Steel Tri can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Steel Tri 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 Steel Tri to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Steel Tri 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.
Creating value in data economy
– The success of analytics program of Steel Tri has opened avenues for new revenue streams for the organization in the industry. This can help Steel Tri to build a more holistic ecosystem as suggested in the Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) case study. Steel Tri can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Steel Tri to increase its market reach. Steel Tri 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.
Threats Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) are -
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 Steel Tri in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Steel Tri.
Shortening product life cycle
– it is one of the major threat that Steel Tri is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Steel Tri 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. Steel Tri 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.
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.
Technology acceleration in Forth Industrial Revolution
– Steel Tri has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Steel Tri 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A), Steel Tri 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 .
High dependence on third party suppliers
– Steel Tri 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.
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 Steel Tri business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Steel Tri 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. Steel Tri 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 Steel Tri 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Indian Steel Ltd: Tri-Party Negotiation - The Buyer (A) 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 Steel Tri needs to make to build a sustainable competitive advantage.
