SWOT Analysis / TOWS Matrix for DCM Shriram (India)
Based on various researches at Oak Spring University , DCM Shriram is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that DCM Shriram can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the DCM Shriram, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which DCM Shriram 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 DCM Shriram can be done for the following purposes –
1. Strategic planning of DCM Shriram
2. Improving business portfolio management of DCM Shriram
3. Assessing feasibility of the new initiative in India
4. Making a Chemicals - Plastics & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of DCM Shriram
Strengths of DCM Shriram | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of DCM Shriram are -
High switching costs
– The high switching costs that DCM Shriram 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.
High brand equity
– DCM Shriram has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled DCM Shriram to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Chemicals - Plastics & Rubber industry
– DCM Shriram has clearly differentiated products in the market place. This has enabled DCM Shriram to fetch slight price premium compare to the competitors in the Chemicals - Plastics & Rubber industry. The sustainable margins have also helped DCM Shriram to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of DCM Shriram in the Basic Materials sector have low bargaining power. DCM Shriram has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps DCM Shriram to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Chemicals - Plastics & Rubber
– DCM Shriram is one of the leading players in the Chemicals - Plastics & Rubber industry in India. Over the years it has not only transformed the business landscape in the Chemicals - Plastics & Rubber industry in India but also across the existing markets. The ability to lead change has enabled DCM Shriram in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– DCM Shriram is one of the leading players in the Chemicals - Plastics & Rubber 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.
Strong track record of project management in the Chemicals - Plastics & Rubber industry
– DCM Shriram is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of DCM Shriram
– The covid-19 pandemic has put organizational resilience at the centre of everthing DCM Shriram does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– DCM Shriram is one of the most innovative firm in Chemicals - Plastics & Rubber sector.
Learning organization
- DCM Shriram 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 DCM Shriram is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at DCM Shriram emphasize – knowledge, initiative, and innovation.
Digital Transformation in Chemicals - Plastics & Rubber industry
- digital transformation varies from industry to industry. For DCM Shriram digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. DCM Shriram 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.
Operational resilience
– The operational resilience strategy of DCM Shriram comprises – understanding the underlying the factors in the Chemicals - Plastics & Rubber 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.
Weaknesses of DCM Shriram | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DCM Shriram are -
Increasing silos among functional specialists
– The organizational structure of DCM Shriram is dominated by functional specialists. It is not different from other players in the Chemicals - Plastics & Rubber industry, but DCM Shriram needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help DCM Shriram to focus more on services in the Chemicals - Plastics & Rubber industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, DCM Shriram has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemicals - Plastics & Rubber industry over the last five years. DCM Shriram 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.
Interest costs
– Compare to the competition, DCM Shriram 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.
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 DCM Shriram supply chain. Even after few cautionary changes, DCM Shriram is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left DCM Shriram vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, DCM Shriram 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 Chemicals - Plastics & Rubber industry using digital technology.
Aligning sales with marketing
– From the outside it seems that DCM Shriram needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemicals - Plastics & Rubber industry have deep experience in developing customer relationships. Marketing department at DCM Shriram can leverage the sales team experience to cultivate customer relationships as DCM Shriram is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of India, DCM Shriram needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of DCM Shriram, it seems that company is thinking out the frontier risks that can impact Chemicals - Plastics & Rubber industry. 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 dependence on DCM Shriram ‘s star products
– The top 2 products and services of DCM Shriram still accounts for major business revenue. This dependence on star products in Chemicals - Plastics & Rubber industry has resulted into insufficient focus on developing new products, even though DCM Shriram has relatively successful track record of launching new products.
Lack of clear differentiation of DCM Shriram products
– To increase the profitability and margins on the products, DCM Shriram needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As DCM Shriram is one of the leading players in the Chemicals - Plastics & Rubber industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Chemicals - Plastics & Rubber industry in last five years.
DCM Shriram Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of DCM Shriram are -
Building a culture of innovation
– managers at DCM Shriram 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 Chemicals - Plastics & Rubber industry.
Manufacturing automation
– DCM Shriram can use the latest technology developments to improve its manufacturing and designing process in Chemicals - Plastics & Rubber 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 DCM Shriram in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemicals - Plastics & Rubber industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of DCM Shriram has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help DCM Shriram to build a more holistic ecosystem for DCM Shriram products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– DCM Shriram 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, DCM Shriram can use these opportunities to build new business models that can help the communities that DCM Shriram operates in. Secondly it can use opportunities from government spending in Chemicals - Plastics & Rubber sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, DCM Shriram 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 DCM Shriram to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– DCM Shriram 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for DCM Shriram 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 DCM Shriram to hire the very best people irrespective of their geographical location.
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 DCM Shriram 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.
Use of Bitcoin and other crypto currencies for transactions in Chemicals - Plastics & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for DCM Shriram in the Chemicals - Plastics & Rubber industry. Now DCM Shriram can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, DCM Shriram 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.
Buying journey improvements
– DCM Shriram can improve the customer journey of consumers in the Chemicals - Plastics & Rubber 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.
Threats DCM Shriram External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of DCM Shriram are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for DCM Shriram in Chemicals - Plastics & Rubber industry. The Chemicals - Plastics & Rubber 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
– DCM Shriram has witnessed rapid integration of technology during Covid-19 in the Chemicals - Plastics & Rubber industry. As one of the leading players in the industry, DCM Shriram needs to keep up with the evolution of technology in the Chemicals - Plastics & Rubber 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, DCM Shriram can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate DCM Shriram prominent markets.
Shortening product life cycle
– it is one of the major threat that DCM Shriram is facing in Chemicals - Plastics & Rubber 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 DCM Shriram business can come under increasing regulations regarding data privacy, data security, etc.
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. DCM Shriram needs to understand the core reasons impacting the Chemicals - Plastics & Rubber industry. This will help it in building a better workplace.
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 DCM Shriram in the Chemicals - Plastics & Rubber sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemicals - Plastics & Rubber industry are lowering. It can presents DCM Shriram with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemicals - Plastics & Rubber sector.
Environmental challenges
– DCM Shriram 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. DCM Shriram can take advantage of this fund but it will also bring new competitors in the Chemicals - Plastics & Rubber industry.
Stagnating economy with rate increase
– DCM Shriram 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 Chemicals - Plastics & Rubber industry.
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 DCM Shriram.
Weighted SWOT Analysis of DCM Shriram Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at DCM Shriram 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 DCM Shriram 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 DCM Shriram 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 DCM Shriram 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 DCM Shriram needs to make to build a sustainable competitive advantage.
