Growing Financial Services in India: Aditya Birla Financial Services Group SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Growing Financial Services in India: Aditya Birla Financial Services Group
To maximize their effectiveness, color cases should be printed in color.Aditya Birla Financial Services Group is a large, broad-based, Indian financial services institution offering products ranging from life insurance and mutual funds to private equity. The company has witnessed a turnaround in recent years and regained lost market share. However, in recent years, concerns about investor protection has increased financial sector regulatory oversight specifically in the asset management and life insurance space and changed the rules of the game. Additionally, the central bank has invited new banks to apply for licenses to operate in the country. In the face of these changes, the company has to figure out what its strategy should be to realize its vision of becoming a leading integrated financial services player offering customers a menu of products that support their needs at different stages of their life.
Swot Analysis of "Growing Financial Services in India: Aditya Birla Financial Services Group" written by Paul M. Healy, Rachna Tahilyani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Birla Financial facing as an external strategic factors. Some of the topics covered in Growing Financial Services in India: Aditya Birla Financial Services Group case study are - Strategic Management Strategies, Change management, Collaboration, Demographics, Entrepreneurship, Financial management, Growth strategy, Leadership, Leadership development, Marketing, Organizational structure, Risk management, Strategy execution and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Growing Financial Services in India: Aditya Birla Financial Services Group casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Growing Financial Services in India: Aditya Birla Financial Services Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Growing Financial Services in India: Aditya Birla Financial Services Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Birla Financial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Birla Financial 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 Growing Financial Services in India: Aditya Birla Financial Services Group can be done for the following purposes –
1. Strategic planning using facts provided in Growing Financial Services in India: Aditya Birla Financial Services Group case study
2. Improving business portfolio management of Birla Financial
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Birla Financial
Strengths Growing Financial Services in India: Aditya Birla Financial Services Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Birla Financial in Growing Financial Services in India: Aditya Birla Financial Services Group Harvard Business Review case study are -
Organizational Resilience of Birla Financial
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Birla Financial does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Birla Financial 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 Growing Financial Services in India: Aditya Birla Financial Services Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Birla Financial is one of the most innovative firm in sector. Manager in Growing Financial Services in India: Aditya Birla Financial Services Group Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Birla Financial 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.
Learning organization
- Birla Financial 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 Birla Financial is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Growing Financial Services in India: Aditya Birla Financial Services Group Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Birla Financial is present in almost all the verticals within the industry. This has provided firm in Growing Financial Services in India: Aditya Birla Financial Services Group 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.
Training and development
– Birla Financial has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Growing Financial Services in India: Aditya Birla Financial Services Group Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Birla Financial 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 Growing Financial Services in India: Aditya Birla Financial Services Group - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Birla Financial is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Birla Financial in the sector have low bargaining power. Growing Financial Services in India: Aditya Birla Financial Services Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Birla Financial to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Birla Financial has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Birla Financial to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Growing Financial Services in India: Aditya Birla Financial Services Group firm has clearly differentiated products in the market place. This has enabled Birla Financial to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Birla Financial to invest into research and development (R&D) and innovation.
Weaknesses Growing Financial Services in India: Aditya Birla Financial Services Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Growing Financial Services in India: Aditya Birla Financial Services Group are -
Increasing silos among functional specialists
– The organizational structure of Birla Financial is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Birla Financial needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Birla Financial to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Growing Financial Services in India: Aditya Birla Financial Services Group, in the dynamic environment Birla Financial has struggled to respond to the nimble upstart competition. Birla Financial has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Growing Financial Services in India: Aditya Birla Financial Services Group, it seems that the employees of Birla Financial 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.
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 Birla Financial supply chain. Even after few cautionary changes mentioned in the HBR case study - Growing Financial Services in India: Aditya Birla Financial Services Group, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Birla Financial vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Birla Financial 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. Birla Financial 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 Growing Financial Services in India: Aditya Birla Financial Services Group HBR case study mentions - Birla Financial 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.
Skills based hiring
– The stress on hiring functional specialists at Birla Financial 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Growing Financial Services in India: Aditya Birla Financial Services Group HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Birla Financial has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Birla Financial 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.
High cash cycle compare to competitors
Birla Financial has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study Growing Financial Services in India: Aditya Birla Financial Services Group 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 Growing Financial Services in India: Aditya Birla Financial Services Group can leverage the sales team experience to cultivate customer relationships as Birla Financial is planning to shift buying processes online.
Opportunities Growing Financial Services in India: Aditya Birla Financial Services Group | 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 Growing Financial Services in India: Aditya Birla Financial Services Group are -
Loyalty marketing
– Birla Financial 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Birla Financial 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Birla Financial 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, Growing Financial Services in India: Aditya Birla Financial Services Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Birla Financial can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Growing Financial Services in India: Aditya Birla Financial Services Group 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.
Creating value in data economy
– The success of analytics program of Birla Financial has opened avenues for new revenue streams for the organization in the industry. This can help Birla Financial to build a more holistic ecosystem as suggested in the Growing Financial Services in India: Aditya Birla Financial Services Group case study. Birla Financial can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Birla Financial 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.
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 Birla Financial in the consumer business. Now Birla Financial can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Birla Financial can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Birla Financial 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 Birla Financial to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Birla Financial 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. Birla Financial 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
– Birla Financial 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 Growing Financial Services in India: Aditya Birla Financial Services Group - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Birla Financial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Birla Financial 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Birla Financial can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Growing Financial Services in India: Aditya Birla Financial Services Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Growing Financial Services in India: Aditya Birla Financial Services Group are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Growing Financial Services in India: Aditya Birla Financial Services Group, Birla Financial may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. Birla Financial 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.
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 Birla Financial business can come under increasing regulations regarding data privacy, data security, etc.
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 Birla Financial.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Birla Financial can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Birla Financial has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Birla Financial needs to keep up with the evolution of technology in the Finance & Accounting 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.
Environmental challenges
– Birla Financial 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. Birla Financial can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Birla Financial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Birla Financial 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.
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 Birla Financial in the Finance & Accounting sector and impact the bottomline of the organization.
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. Birla Financial needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Birla Financial 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 Finance & Accounting industry regulations.
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.
Weighted SWOT Analysis of Growing Financial Services in India: Aditya Birla Financial Services Group 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 Growing Financial Services in India: Aditya Birla Financial Services Group 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 Growing Financial Services in India: Aditya Birla Financial Services Group 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 Growing Financial Services in India: Aditya Birla Financial Services Group 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 Growing Financial Services in India: Aditya Birla Financial Services Group 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 Birla Financial needs to make to build a sustainable competitive advantage.
