TVS Motor Company (TVSM) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Manufacturers
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for TVS Motor Company (India)
Based on various researches at Oak Spring University , TVS Motor Company is operating in a macro-environment that has been destablized by – there is backlash against globalization, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
Introduction to SWOT Analysis of TVS Motor Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that TVS Motor Company can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the TVS Motor Company, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which TVS Motor Company 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 TVS Motor Company can be done for the following purposes –
1. Strategic planning of TVS Motor Company
2. Improving business portfolio management of TVS Motor Company
3. Assessing feasibility of the new initiative in India
4. Making a Auto & Truck Manufacturers sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of TVS Motor Company
Strengths of TVS Motor Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of TVS Motor Company are -
Operational resilience
– The operational resilience strategy of TVS Motor Company comprises – understanding the underlying the factors in the Auto & Truck Manufacturers 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.
Low bargaining power of suppliers
– Suppliers of TVS Motor Company in the Consumer Cyclical sector have low bargaining power. TVS Motor Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps TVS Motor Company to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– TVS Motor Company has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled TVS Motor Company to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Auto & Truck Manufacturers industry
– TVS Motor Company is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Auto & Truck Manufacturers
– TVS Motor Company is one of the leading players in the Auto & Truck Manufacturers industry in India. Over the years it has not only transformed the business landscape in the Auto & Truck Manufacturers industry in India but also across the existing markets. The ability to lead change has enabled TVS Motor Company in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– TVS Motor Company is present in almost all the verticals within the Auto & Truck Manufacturers industry. This has provided TVS Motor Company 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.
Successful track record of launching new products
– TVS Motor Company has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. TVS Motor Company 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.
Training and development
– TVS Motor Company has one of the best training and development program in Consumer Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– TVS Motor Company is one of the leading players in the Auto & Truck Manufacturers industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that TVS Motor Company has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of TVS Motor Company
– The covid-19 pandemic has put organizational resilience at the centre of everthing TVS Motor Company does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- TVS Motor Company 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 TVS Motor Company is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at TVS Motor Company emphasize – knowledge, initiative, and innovation.
Weaknesses of TVS Motor Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TVS Motor Company are -
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 TVS Motor Company supply chain. Even after few cautionary changes, TVS Motor Company is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left TVS Motor Company vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of TVS Motor Company is dominated by functional specialists. It is not different from other players in the Auto & Truck Manufacturers industry, but TVS Motor Company needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help TVS Motor Company to focus more on services in the Auto & Truck Manufacturers industry rather than just following the product oriented approach.
High dependence on TVS Motor Company ‘s star products
– The top 2 products and services of TVS Motor Company still accounts for major business revenue. This dependence on star products in Auto & Truck Manufacturers industry has resulted into insufficient focus on developing new products, even though TVS Motor Company has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, TVS Motor Company has high operating costs in the Auto & Truck Manufacturers industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract TVS Motor Company lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, TVS Motor Company is slow explore the new channels of communication. These new channels of communication can help TVS Motor Company to provide better information regarding Auto & Truck Manufacturers products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of TVS Motor Company is just above the Auto & Truck Manufacturers industry average. It 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.
Aligning sales with marketing
– From the outside it seems that TVS Motor Company needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Manufacturers industry have deep experience in developing customer relationships. Marketing department at TVS Motor Company can leverage the sales team experience to cultivate customer relationships as TVS Motor Company is planning to shift buying processes online.
High cash cycle compare to competitors
TVS Motor Company has a high cash cycle compare to other players in the Auto & Truck Manufacturers industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– TVS Motor Company 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.
Interest costs
– Compare to the competition, TVS Motor Company 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.
Slow decision making process
– As mentioned earlier in the report, TVS Motor Company has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Manufacturers industry over the last five years. TVS Motor Company 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.
TVS Motor Company Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of TVS Motor Company are -
Loyalty marketing
– TVS Motor Company 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.
Building a culture of innovation
– managers at TVS Motor Company 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 Auto & Truck Manufacturers industry.
Leveraging digital technologies
– TVS Motor Company 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.
Learning at scale
– Online learning technologies has now opened space for TVS Motor Company 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects TVS Motor Company can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Auto & Truck Manufacturers industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for TVS Motor Company in the Auto & Truck Manufacturers industry. Now TVS Motor Company can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– TVS Motor Company can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Manufacturers sector. 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for TVS Motor Company in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Manufacturers industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of TVS Motor Company has opened avenues for new revenue streams for the organization in Auto & Truck Manufacturers industry. This can help TVS Motor Company to build a more holistic ecosystem for TVS Motor Company products in the Auto & Truck Manufacturers industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Manufacturers industry, but it has also influenced the consumer preferences. TVS Motor Company can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– TVS Motor Company can develop new processes and procedures in Auto & Truck Manufacturers 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.
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. TVS Motor Company can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, TVS Motor Company can use these opportunities to build new business models that can help the communities that TVS Motor Company operates in. Secondly it can use opportunities from government spending in Auto & Truck Manufacturers sector.
Threats TVS Motor Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of TVS Motor Company are -
Technology acceleration in Forth Industrial Revolution
– TVS Motor Company has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Manufacturers industry. As one of the leading players in the industry, TVS Motor Company needs to keep up with the evolution of technology in the Auto & Truck Manufacturers 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.
Regulatory challenges
– TVS Motor Company 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 Auto & Truck Manufacturers industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Manufacturers industry are lowering. It can presents TVS Motor Company with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Manufacturers sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, TVS Motor Company may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Manufacturers sector.
Shortening product life cycle
– it is one of the major threat that TVS Motor Company is facing in Auto & Truck Manufacturers sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of TVS Motor Company
– 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 TVS Motor Company.
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 TVS Motor Company in the Auto & Truck Manufacturers sector and impact the bottomline of the organization.
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 TVS Motor Company business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on TVS Motor Company 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 Auto & Truck Manufacturers industry and other sectors.
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. TVS Motor Company needs to understand the core reasons impacting the Auto & Truck Manufacturers industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– TVS Motor Company 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 Auto & Truck Manufacturers industry.
Environmental challenges
– TVS Motor Company 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. TVS Motor Company can take advantage of this fund but it will also bring new competitors in the Auto & Truck Manufacturers industry.
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. TVS Motor Company 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.
Weighted SWOT Analysis of TVS Motor Company Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at TVS Motor 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 TVS Motor 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 TVS Motor 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 TVS Motor Company 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 TVS Motor Company needs to make to build a sustainable competitive advantage.