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 commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
Successful track record of launching new products
– Crompton Greaves Consumer Electricals Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crompton Greaves Consumer Electricals Ltd 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.
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.
Superior customer experience
– The customer experience strategy of Crompton Greaves Consumer Electricals Ltd in Appliance & Tool industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Crompton Greaves Consumer Electricals Ltd is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Appliance & Tool industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Crompton Greaves Consumer Electricals Ltd is one of the most innovative firm in Appliance & Tool sector.
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.
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.
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.
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 -
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.
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.
High bargaining power of channel partners in Appliance & Tool industry
– because of the regulatory requirements in India, Crompton Greaves Consumer Electricals Ltd 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 Appliance & Tool industry.
Workers concerns about automation
– As automation is fast increasing in the Appliance & Tool industry, Crompton Greaves Consumer Electricals Ltd 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.
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 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.
Compensation and incentives
– The revenue per employee of Crompton Greaves Consumer Electricals Ltd is just above the Appliance & Tool 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.
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.
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.
Products dominated business model
– Even though Crompton Greaves Consumer Electricals Ltd has some of the most successful models in the Appliance & Tool industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Crompton Greaves Consumer Electricals Ltd should strive to include more intangible value offerings along with its core products and services.
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 -
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.
Using analytics as competitive advantage
– Crompton Greaves Consumer Electricals Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Appliance & Tool sector. This continuous investment in analytics has enabled Crompton Greaves Consumer Electricals Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Crompton Greaves Consumer Electricals Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crompton Greaves Consumer Electricals Ltd can use these opportunities to build new business models that can help the communities that Crompton Greaves Consumer Electricals Ltd operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Crompton Greaves Consumer Electricals Ltd to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Crompton Greaves Consumer Electricals Ltd to hire the very best people irrespective of their geographical location.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Appliance & Tool industry, but it has also influenced the consumer preferences. Crompton Greaves Consumer Electricals Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Crompton Greaves Consumer Electricals Ltd 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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Appliance & Tool industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Crompton Greaves Consumer Electricals Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Crompton Greaves Consumer Electricals Ltd
– 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 Crompton Greaves Consumer Electricals Ltd.
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.
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 Crompton Greaves Consumer Electricals Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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.