Based on various researches at Oak Spring University , Crompton Greaves Consumer Electricals Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Crompton Greaves Consumer Electricals Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Crompton Greaves Consumer Electricals Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crompton Greaves Consumer Electricals Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd can be done for the following purposes –
1. Strategic planning of Crompton Greaves Consumer Electricals Ltd
2. Improving business portfolio management of Crompton Greaves Consumer Electricals Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Crompton Greaves Consumer Electricals Ltd
Strengths of Crompton Greaves Consumer Electricals Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crompton Greaves Consumer Electricals Ltd are -
Cross disciplinary teams
– Horizontal connected teams at the Crompton Greaves Consumer Electricals Ltd 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.
Diverse revenue streams
– Crompton Greaves Consumer Electricals Ltd is present in almost all the verticals within the Appliance & Tool industry. This has provided Crompton Greaves Consumer Electricals Ltd a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Crompton Greaves Consumer Electricals Ltd is one of the leading players in the Appliance & Tool 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.
Organizational Resilience of Crompton Greaves Consumer Electricals Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Crompton Greaves Consumer Electricals Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Crompton Greaves Consumer Electricals Ltd emphasize – knowledge, initiative, and innovation.
Digital Transformation in Appliance & Tool industry
- digital transformation varies from industry to industry. For Crompton Greaves Consumer Electricals Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Crompton Greaves Consumer Electricals Ltd has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Appliance & Tool industry
– Crompton Greaves Consumer Electricals Ltd has clearly differentiated products in the market place. This has enabled Crompton Greaves Consumer Electricals Ltd to fetch slight price premium compare to the competitors in the Appliance & Tool industry. The sustainable margins have also helped Crompton Greaves Consumer Electricals Ltd to invest into research and development (R&D) and innovation.
Strong track record of project management in the Appliance & Tool industry
– Crompton Greaves Consumer Electricals Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Crompton Greaves Consumer Electricals Ltd comprises – understanding the underlying the factors in the Appliance & Tool 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.
High switching costs
– The high switching costs that Crompton Greaves Consumer Electricals Ltd 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.
Ability to lead change in Appliance & Tool
– Crompton Greaves Consumer Electricals Ltd is one of the leading players in the Appliance & Tool industry in India. Over the years it has not only transformed the business landscape in the Appliance & Tool industry in India but also across the existing markets. The ability to lead change has enabled Crompton Greaves Consumer Electricals Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Crompton Greaves Consumer Electricals Ltd 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.
Weaknesses of Crompton Greaves Consumer Electricals Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crompton Greaves Consumer Electricals Ltd are -
High operating costs
– Compare to the competitors, Crompton Greaves Consumer Electricals Ltd has high operating costs in the Appliance & Tool industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Crompton Greaves Consumer Electricals Ltd lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Crompton Greaves Consumer Electricals Ltd is slow explore the new channels of communication. These new channels of communication can help Crompton Greaves Consumer Electricals Ltd to provide better information regarding Appliance & Tool products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Crompton Greaves Consumer Electricals Ltd has a high cash cycle compare to other players in the Appliance & Tool industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Crompton Greaves Consumer Electricals Ltd ‘s star products
– The top 2 products and services of Crompton Greaves Consumer Electricals Ltd still accounts for major business revenue. This dependence on star products in Appliance & Tool industry has resulted into insufficient focus on developing new products, even though Crompton Greaves Consumer Electricals Ltd has relatively successful track record of launching new products.
Skills based hiring in Appliance & Tool industry
– The stress on hiring functional specialists at Crompton Greaves Consumer Electricals Ltd 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 decision making process
– As mentioned earlier in the report, Crompton Greaves Consumer Electricals Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Appliance & Tool industry over the last five years. Crompton Greaves Consumer Electricals Ltd 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.
Capital Spending Reduction
– Even during the low interest decade, Crompton Greaves Consumer Electricals Ltd 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 Appliance & Tool industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Crompton Greaves Consumer Electricals Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Appliance & Tool industry have deep experience in developing customer relationships. Marketing department at Crompton Greaves Consumer Electricals Ltd can leverage the sales team experience to cultivate customer relationships as Crompton Greaves Consumer Electricals Ltd is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Crompton Greaves Consumer Electricals Ltd is one of the leading players in the Appliance & Tool industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Appliance & Tool industry in last five years.
Need for greater diversity
– Crompton Greaves Consumer Electricals Ltd 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, Crompton Greaves Consumer Electricals Ltd 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.
Crompton Greaves Consumer Electricals Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Crompton Greaves Consumer Electricals Ltd are -
Leveraging digital technologies
– Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd to increase its market reach. Crompton Greaves Consumer Electricals Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Crompton Greaves Consumer Electricals Ltd has opened avenues for new revenue streams for the organization in Appliance & Tool industry. This can help Crompton Greaves Consumer Electricals Ltd to build a more holistic ecosystem for Crompton Greaves Consumer Electricals Ltd products in the Appliance & Tool industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Crompton Greaves Consumer Electricals Ltd can improve the customer journey of consumers in the Appliance & Tool industry by using analytics and artificial intelligence. It 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crompton Greaves Consumer Electricals Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Appliance & Tool industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Appliance & Tool industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crompton Greaves Consumer Electricals Ltd 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. Crompton Greaves Consumer Electricals Ltd 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.
Developing new processes and practices
– Crompton Greaves Consumer Electricals Ltd can develop new processes and procedures in Appliance & Tool 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crompton Greaves Consumer Electricals Ltd is facing challenges because of the dominance of functional experts in the organization. Crompton Greaves Consumer Electricals Ltd can utilize new technology in the field of Appliance & Tool industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Crompton Greaves Consumer Electricals Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Crompton Greaves Consumer Electricals Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Crompton Greaves Consumer Electricals Ltd 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 Appliance & Tool industry.
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. Crompton Greaves Consumer Electricals Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Crompton Greaves Consumer Electricals Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Crompton Greaves Consumer Electricals Ltd are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crompton Greaves Consumer Electricals Ltd in Appliance & Tool industry. The Appliance & Tool 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.
Technology acceleration in Forth Industrial Revolution
– Crompton Greaves Consumer Electricals Ltd has witnessed rapid integration of technology during Covid-19 in the Appliance & Tool industry. As one of the leading players in the industry, Crompton Greaves Consumer Electricals Ltd needs to keep up with the evolution of technology in the Appliance & Tool 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Appliance & Tool industry are lowering. It can presents Crompton Greaves Consumer Electricals Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Appliance & Tool sector.
Consumer confidence and its impact on Crompton Greaves Consumer Electricals Ltd 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 Appliance & Tool industry and other sectors.
Regulatory challenges
– Crompton Greaves Consumer Electricals Ltd 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 Appliance & Tool industry regulations.
High dependence on third party suppliers
– Crompton Greaves Consumer Electricals Ltd 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.
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. Crompton Greaves Consumer Electricals Ltd needs to understand the core reasons impacting the Appliance & Tool industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Crompton Greaves Consumer Electricals Ltd 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 Appliance & Tool 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. Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd in the Appliance & Tool sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Crompton Greaves Consumer Electricals Ltd is facing in Appliance & Tool sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Crompton Greaves Consumer Electricals Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd 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 Crompton Greaves Consumer Electricals Ltd needs to make to build a sustainable competitive advantage.