Micromax: Scaling the Largest Indian Mobile Handset Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Micromax: Scaling the Largest Indian Mobile Handset Company
It is January 2014 and Rahul Sharma, cofounder of Micromax Informatics (Micromax), the largest Indian mobile handset company, is preparing for an emergency conference call with his private equity investors. In the last six years, Micromax had grown its annual product revenues from $54M to over $1B. Unfortunately, it was difficult for the founding team to keep up with Micromax's rapid growth, triggering a series of missteps in 2010 that brought the company close to catastrophe. In response, investors had convinced Sharma and his cofounders to hire their first outside CEO, Deepak Mehrotra, and several senior professionals. With the founders working alongside the new "professionals," frequent overlaps and sometimes run-ins occurred. Now, both Mehrotra and the head of their smartphone division had resigned. Sharma evaluates their options: Would the founders need to reconsider their involvement in the company they created? Or was there still a middle ground where both founders and professionals could coexist in the business?
Swot Analysis of "Micromax: Scaling the Largest Indian Mobile Handset Company" written by Ranjay Gulati, Rachna Tahilyani, Alicia DeSantola includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Micromax Sharma facing as an external strategic factors. Some of the topics covered in Micromax: Scaling the Largest Indian Mobile Handset Company case study are - Strategic Management Strategies, Mobile, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Micromax: Scaling the Largest Indian Mobile Handset Company casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, geopolitical disruptions, increasing energy prices, cloud computing is disrupting traditional business models,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Micromax: Scaling the Largest Indian Mobile Handset Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Micromax: Scaling the Largest Indian Mobile Handset Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Micromax Sharma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company can be done for the following purposes –
1. Strategic planning using facts provided in Micromax: Scaling the Largest Indian Mobile Handset Company case study
2. Improving business portfolio management of Micromax Sharma
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 Micromax Sharma
Strengths Micromax: Scaling the Largest Indian Mobile Handset Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Micromax Sharma in Micromax: Scaling the Largest Indian Mobile Handset Company Harvard Business Review case study are -
Successful track record of launching new products
– Micromax Sharma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Micromax Sharma 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.
Strong track record of project management
– Micromax Sharma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Micromax Sharma is one of the most innovative firm in sector. Manager in Micromax: Scaling the Largest Indian Mobile Handset Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Micromax Sharma is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Micromax Sharma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Micromax Sharma 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 Micromax Sharma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Micromax: Scaling the Largest Indian Mobile Handset Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Micromax Sharma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Micromax Sharma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Micromax Sharma has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Micromax: Scaling the Largest Indian Mobile Handset Company 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.
Cross disciplinary teams
– Horizontal connected teams at the Micromax Sharma 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Micromax: Scaling the Largest Indian Mobile Handset Company firm has clearly differentiated products in the market place. This has enabled Micromax Sharma to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Micromax Sharma to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Micromax Sharma in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Micromax: Scaling the Largest Indian Mobile Handset Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Micromax: Scaling the Largest Indian Mobile Handset Company are -
High cash cycle compare to competitors
Micromax Sharma 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.
Lack of clear differentiation of Micromax Sharma products
– To increase the profitability and margins on the products, Micromax Sharma needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Micromax Sharma 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.
Skills based hiring
– The stress on hiring functional specialists at Micromax Sharma 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Micromax Sharma is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Micromax: Scaling the Largest Indian Mobile Handset Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company, is just above the industry average. Micromax Sharma 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Micromax Sharma 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, Micromax Sharma 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Micromax: Scaling the Largest Indian Mobile Handset Company, in the dynamic environment Micromax Sharma has struggled to respond to the nimble upstart competition. Micromax Sharma has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Micromax Sharma 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 - Micromax: Scaling the Largest Indian Mobile Handset Company should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company can leverage the sales team experience to cultivate customer relationships as Micromax Sharma is planning to shift buying processes online.
Opportunities Micromax: Scaling the Largest Indian Mobile Handset Company | 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 Micromax: Scaling the Largest Indian Mobile Handset Company are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Micromax Sharma 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, Micromax: Scaling the Largest Indian Mobile Handset Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Micromax Sharma 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.
Developing new processes and practices
– Micromax Sharma can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Micromax Sharma can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Micromax: Scaling the Largest Indian Mobile Handset Company 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.
Leveraging digital technologies
– Micromax Sharma 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.
Better consumer reach
– The expansion of the 5G network will help Micromax Sharma to increase its market reach. Micromax Sharma 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.
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. Micromax Sharma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Micromax Sharma 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Micromax Sharma is facing challenges because of the dominance of functional experts in the organization. Micromax: Scaling the Largest Indian Mobile Handset Company 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.
Using analytics as competitive advantage
– Micromax Sharma 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 Micromax: Scaling the Largest Indian Mobile Handset Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Micromax Sharma to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Micromax Sharma in the consumer business. Now Micromax Sharma 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. Micromax Sharma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Micromax Sharma 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. Micromax Sharma 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.
Threats Micromax: Scaling the Largest Indian Mobile Handset Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company are -
Stagnating economy with rate increase
– Micromax Sharma 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Micromax Sharma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Micromax Sharma 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Micromax Sharma 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.
Consumer confidence and its impact on Micromax Sharma 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 Micromax Sharma.
Shortening product life cycle
– it is one of the major threat that Micromax Sharma is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Micromax Sharma 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. Micromax Sharma can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
High dependence on third party suppliers
– Micromax Sharma 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.
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. Micromax Sharma 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.
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 Micromax Sharma in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Micromax: Scaling the Largest Indian Mobile Handset Company, Micromax Sharma 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 .
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. Micromax Sharma can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax Sharma needs to make to build a sustainable competitive advantage.
