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 - – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
High switching costs
– The high switching costs that Micromax Sharma 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.
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.
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.
Operational resilience
– The operational resilience strategy in the Micromax: Scaling the Largest Indian Mobile Handset Company 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.
Diverse revenue streams
– Micromax Sharma is present in almost all the verticals within the industry. This has provided firm in Micromax: Scaling the Largest Indian Mobile Handset Company 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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Micromax Sharma in the sector have low bargaining power. Micromax: Scaling the Largest Indian Mobile Handset Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Micromax Sharma to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Micromax Sharma
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Micromax Sharma does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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 -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company 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 Micromax Sharma 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company, 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ranjay Gulati, Rachna Tahilyani, Alicia DeSantola suggests that, Micromax Sharma 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.
Need for greater diversity
– Micromax Sharma has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Slow to strategic competitive environment developments
– As Micromax: Scaling the Largest Indian Mobile Handset Company HBR case study mentions - Micromax Sharma 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Micromax: Scaling the Largest Indian Mobile Handset Company, it seems that the employees of Micromax Sharma 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.
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.
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.
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 -
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.
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.
Building a culture of innovation
– managers at Micromax Sharma 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.
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.
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.
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 Micromax Sharma 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Micromax Sharma can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 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.
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.
Loyalty marketing
– Micromax Sharma 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.
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.
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.
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.
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 -
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.
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.
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.
Increasing wage structure of Micromax Sharma
– 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 Micromax Sharma.
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.
Technology acceleration in Forth Industrial Revolution
– Micromax Sharma has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Micromax Sharma 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.
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.
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.
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.
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.
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 .
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.