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 - – technology disruption, geopolitical disruptions, increasing commodity prices, wage bills are increasing, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, 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 -
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.
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.
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.
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.
Ability to recruit top talent
– Msil Strikes is one of the leading recruiters in the industry. Managers in the Maruti Suzuki Limited: Industrial Relations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– Maruti Suzuki Limited: Industrial Relations firm has clearly differentiated products in the market place. This has enabled Msil Strikes to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Msil Strikes to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
Highly skilled collaborators
– Msil Strikes 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 Maruti Suzuki Limited: Industrial Relations HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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 -
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.
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.
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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Msil Strikes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Maruti Suzuki Limited: Industrial Relations can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Msil Strikes 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 - Maruti Suzuki Limited: Industrial Relations should strive to include more intangible value offerings along with its core products and services.
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.
Interest costs
– Compare to the competition, Msil Strikes 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Maruti Suzuki Limited: Industrial Relations, it seems that the employees of Msil Strikes don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Slow to strategic competitive environment developments
– As Maruti Suzuki Limited: Industrial Relations HBR case study mentions - Msil Strikes takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities 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.
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.
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.
Leveraging digital technologies
– Msil Strikes 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.
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.
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.
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 Msil Strikes 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.
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.
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.
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. Msil Strikes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Msil Strikes 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.
Better consumer reach
– The expansion of the 5G network will help Msil Strikes to increase its market reach. Msil Strikes 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.
Loyalty marketing
– Msil Strikes 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.
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 -
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 Msil Strikes in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Msil Strikes is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Msil Strikes high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of 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.
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.
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 .
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 Msil Strikes business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
