Case Study Description of Maruti Suzuki Limited: Industrial Relations
In 2011, Maruti Suzuki India Limited (MSIL), India's largest car manufacturer, had three strikes in its new plant in Manesar, India. Although workers wanted recognition of a new union along with improved working conditions, MSIL insisted that workers be represented through the existing union that operated at a nearby plant. Tensions escalated to the point of violence and the matter caught the attention of national media, political parties, national trade unions, and central and state governments. Due to these strikes, MSIL struggled in terms of reputation and market share, and its component suppliers stockpiled inventory. After a series of hectic parleys and stressful episodes, the two parties reached an agreement. However, there were serious doubts as to its longevity and whether Suzuki's Japanese management style was suitable in an Indian context. Authors Rashmi Kumar Aggarwal and Harvinder Singh are affiliated with Institute of Management Technology. Author Rajinder Kaur is affiliated with Panjab University.
Swot Analysis of "Maruti Suzuki Limited: Industrial Relations" written by Rashmi Kumar Aggarwal, Harvinder Singh, Rajinder Kaur includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Msil Strikes facing as an external strategic factors. Some of the topics covered in Maruti Suzuki Limited: Industrial Relations case study are - Strategic Management Strategies, Manufacturing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Maruti Suzuki Limited: Industrial Relations casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing commodity prices, there is increasing trade war between United States & China, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Maruti Suzuki Limited: Industrial Relations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Maruti Suzuki Limited: Industrial Relations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Msil Strikes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Msil Strikes 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 Maruti Suzuki Limited: Industrial Relations can be done for the following purposes –
1. Strategic planning using facts provided in Maruti Suzuki Limited: Industrial Relations case study
2. Improving business portfolio management of Msil Strikes
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 Msil Strikes
Strengths Maruti Suzuki Limited: Industrial Relations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Msil Strikes in Maruti Suzuki Limited: Industrial Relations Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Msil Strikes 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.
Learning organization
- Msil Strikes 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 Msil Strikes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Maruti Suzuki Limited: Industrial Relations Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Msil Strikes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Maruti Suzuki Limited: Industrial Relations 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.
Innovation driven organization
– Msil Strikes is one of the most innovative firm in sector. Manager in Maruti Suzuki Limited: Industrial Relations Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Msil Strikes digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Msil Strikes 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 switching costs
– The high switching costs that Msil Strikes 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.
Analytics focus
– Msil Strikes 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 Rashmi Kumar Aggarwal, Harvinder Singh, Rajinder Kaur 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.
High brand equity
– Msil Strikes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Msil Strikes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Msil Strikes 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 Maruti Suzuki Limited: Industrial Relations - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Msil Strikes is present in almost all the verticals within the industry. This has provided firm in Maruti Suzuki Limited: Industrial Relations 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.
Organizational Resilience of Msil Strikes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Msil Strikes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Msil Strikes in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Maruti Suzuki Limited: Industrial Relations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Maruti Suzuki Limited: Industrial Relations are -
Capital Spending Reduction
– Even during the low interest decade, Msil Strikes 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rashmi Kumar Aggarwal, Harvinder Singh, Rajinder Kaur suggests that, Msil Strikes 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Maruti Suzuki Limited: Industrial Relations 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 Msil Strikes 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Msil Strikes 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. Msil Strikes 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Maruti Suzuki Limited: Industrial Relations, in the dynamic environment Msil Strikes has struggled to respond to the nimble upstart competition. Msil Strikes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Msil Strikes supply chain. Even after few cautionary changes mentioned in the HBR case study - Maruti Suzuki Limited: Industrial Relations, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Msil Strikes vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Maruti Suzuki Limited: Industrial Relations, is just above the industry average. Msil Strikes 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.
Aligning sales with marketing
– It come across in the case study Maruti Suzuki Limited: Industrial Relations 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 Maruti Suzuki Limited: Industrial Relations can leverage the sales team experience to cultivate customer relationships as Msil Strikes is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Msil Strikes is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Msil Strikes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Msil Strikes to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Msil Strikes products
– To increase the profitability and margins on the products, Msil Strikes needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Msil Strikes 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.
Opportunities Maruti Suzuki Limited: Industrial Relations | 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 Maruti Suzuki Limited: Industrial Relations are -
Learning at scale
– Online learning technologies has now opened space for Msil Strikes 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.
Manufacturing automation
– Msil Strikes 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.
Using analytics as competitive advantage
– Msil Strikes 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 Maruti Suzuki Limited: Industrial Relations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Msil Strikes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Msil Strikes 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.
Buying journey improvements
– Msil Strikes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Maruti Suzuki Limited: Industrial Relations 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.
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. Msil Strikes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Msil Strikes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Msil Strikes 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, Maruti Suzuki Limited: Industrial Relations, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Msil Strikes 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. Msil Strikes 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. Msil Strikes 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Msil Strikes 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 Msil Strikes to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Msil Strikes can use these opportunities to build new business models that can help the communities that Msil Strikes operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Msil Strikes in the consumer business. Now Msil Strikes can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Maruti Suzuki Limited: Industrial Relations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Maruti Suzuki Limited: Industrial Relations are -
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 Msil Strikes.
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.
Consumer confidence and its impact on Msil Strikes 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.
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. Msil Strikes 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, Msil Strikes 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 Maruti Suzuki Limited: Industrial Relations .
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.
Environmental challenges
– Msil Strikes 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. Msil Strikes 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
– Msil Strikes has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Msil Strikes 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.
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. Msil Strikes 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.
Stagnating economy with rate increase
– Msil Strikes can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Maruti Suzuki Limited: Industrial Relations, Msil Strikes 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 .
Increasing wage structure of Msil Strikes
– 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 Msil Strikes.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Msil Strikes 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.
Weighted SWOT Analysis of Maruti Suzuki Limited: Industrial Relations 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 Maruti Suzuki Limited: Industrial Relations 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 Maruti Suzuki Limited: Industrial Relations 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 Maruti Suzuki Limited: Industrial Relations 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 Maruti Suzuki Limited: Industrial Relations 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 Msil Strikes needs to make to build a sustainable competitive advantage.