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 government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, 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 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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Maruti Suzuki Limited: Industrial Relations 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.
Successful track record of launching new products
– Msil Strikes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Msil Strikes has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Msil Strikes in the sector have low bargaining power. Maruti Suzuki Limited: Industrial Relations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Msil Strikes to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
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.
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.
Low market penetration in new markets
– Outside its home market of Msil Strikes, firm in the HBR case study Maruti Suzuki Limited: Industrial Relations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Maruti Suzuki Limited: Industrial Relations, 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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Msil Strikes 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.
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.
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 -
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.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Msil Strikes is facing challenges because of the dominance of functional experts in the organization. Maruti Suzuki Limited: Industrial Relations 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.
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.
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.
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.
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.
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.
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 -
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.
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.
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 .
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.
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.
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.
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.
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.
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.
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.
Regulatory challenges
– Msil Strikes needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Msil Strikes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.