JK Tyre&Industries (JKIN) SWOT Analysis / TOWS Matrix / MBA Resources
Tires
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for JK Tyre&Industries (India)
Based on various researches at Oak Spring University , JK Tyre&Industries is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, technology disruption, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of JK Tyre&Industries
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that JK Tyre&Industries can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the JK Tyre&Industries, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which JK Tyre&Industries 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 JK Tyre&Industries can be done for the following purposes –
1. Strategic planning of JK Tyre&Industries
2. Improving business portfolio management of JK Tyre&Industries
3. Assessing feasibility of the new initiative in India
4. Making a Tires sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of JK Tyre&Industries
Strengths of JK Tyre&Industries | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of JK Tyre&Industries are -
Learning organization
- JK Tyre&Industries 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 JK Tyre&Industries is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at JK Tyre&Industries emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– JK Tyre&Industries has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – JK Tyre&Industries staying ahead in the Tires industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– JK Tyre&Industries is one of the most innovative firm in Tires sector.
Ability to recruit top talent
– JK Tyre&Industries is one of the leading players in the Tires 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.
Low bargaining power of suppliers
– Suppliers of JK Tyre&Industries in the Consumer Cyclical sector have low bargaining power. JK Tyre&Industries has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps JK Tyre&Industries to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– JK Tyre&Industries 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.
Diverse revenue streams
– JK Tyre&Industries is present in almost all the verticals within the Tires industry. This has provided JK Tyre&Industries 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 lead change in Tires
– JK Tyre&Industries is one of the leading players in the Tires industry in India. Over the years it has not only transformed the business landscape in the Tires industry in India but also across the existing markets. The ability to lead change has enabled JK Tyre&Industries in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the JK Tyre&Industries 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.
Highly skilled collaborators
– JK Tyre&Industries has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Tires industry. Secondly the value chain collaborators of JK Tyre&Industries have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– JK Tyre&Industries has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. JK Tyre&Industries 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.
Organizational Resilience of JK Tyre&Industries
– The covid-19 pandemic has put organizational resilience at the centre of everthing JK Tyre&Industries does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of JK Tyre&Industries | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of JK Tyre&Industries are -
Low market penetration in new markets
– Outside its home market of India, JK Tyre&Industries needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though JK Tyre&Industries has some of the most successful models in the Tires industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. JK Tyre&Industries should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, JK Tyre&Industries 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 Tires industry using digital technology.
Lack of clear differentiation of JK Tyre&Industries products
– To increase the profitability and margins on the products, JK Tyre&Industries needs to provide more differentiated products than what it is currently offering in the marketplace.
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 JK Tyre&Industries supply chain. Even after few cautionary changes, JK Tyre&Industries is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left JK Tyre&Industries vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, JK Tyre&Industries has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Tires industry over the last five years. JK Tyre&Industries 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, JK Tyre&Industries is slow explore the new channels of communication. These new channels of communication can help JK Tyre&Industries to provide better information regarding Tires products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Tires industry
– because of the regulatory requirements in India, JK Tyre&Industries 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 Tires industry.
Ability to respond to the competition
– As the decision making is very deliberative at JK Tyre&Industries, in the dynamic environment of Tires industry it has struggled to respond to the nimble upstart competition. JK Tyre&Industries has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of JK Tyre&Industries, it seems that company is thinking out the frontier risks that can impact Tires 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 cash cycle compare to competitors
JK Tyre&Industries has a high cash cycle compare to other players in the Tires industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
JK Tyre&Industries Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of JK Tyre&Industries are -
Learning at scale
– Online learning technologies has now opened space for JK Tyre&Industries 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for JK Tyre&Industries in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Tires industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of JK Tyre&Industries has opened avenues for new revenue streams for the organization in Tires industry. This can help JK Tyre&Industries to build a more holistic ecosystem for JK Tyre&Industries products in the Tires industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– JK Tyre&Industries can develop new processes and procedures in Tires 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.
Manufacturing automation
– JK Tyre&Industries can use the latest technology developments to improve its manufacturing and designing process in Tires 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, JK Tyre&Industries is facing challenges because of the dominance of functional experts in the organization. JK Tyre&Industries can utilize new technology in the field of Tires industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Tires industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for JK Tyre&Industries in the Tires industry. Now JK Tyre&Industries can target international markets with far fewer capital restrictions requirements than the existing system.
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 JK Tyre&Industries 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.
Using analytics as competitive advantage
– JK Tyre&Industries has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Tires sector. This continuous investment in analytics has enabled JK Tyre&Industries to build a competitive advantage using analytics. The analytics driven competitive advantage can help JK Tyre&Industries to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– JK Tyre&Industries can improve the customer journey of consumers in the Tires 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.
Leveraging digital technologies
– JK Tyre&Industries 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 JK Tyre&Industries to increase its market reach. JK Tyre&Industries 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.
Building a culture of innovation
– managers at JK Tyre&Industries 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 Tires industry.
Threats JK Tyre&Industries External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of JK Tyre&Industries are -
High dependence on third party suppliers
– JK Tyre&Industries 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.
Consumer confidence and its impact on JK Tyre&Industries 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 Tires industry and other sectors.
Increasing wage structure of JK Tyre&Industries
– 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 JK Tyre&Industries.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Tires industry are lowering. It can presents JK Tyre&Industries with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Tires sector.
Regulatory challenges
– JK Tyre&Industries 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 Tires industry regulations.
Technology acceleration in Forth Industrial Revolution
– JK Tyre&Industries has witnessed rapid integration of technology during Covid-19 in the Tires industry. As one of the leading players in the industry, JK Tyre&Industries needs to keep up with the evolution of technology in the Tires 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.
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. JK Tyre&Industries 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for JK Tyre&Industries in Tires industry. The Tires 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.
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. JK Tyre&Industries needs to understand the core reasons impacting the Tires industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Tires industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. JK Tyre&Industries can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, JK Tyre&Industries may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Tires sector.
Shortening product life cycle
– it is one of the major threat that JK Tyre&Industries is facing in Tires sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, JK Tyre&Industries 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 JK Tyre&Industries prominent markets.
Weighted SWOT Analysis of JK Tyre&Industries Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at JK Tyre&Industries 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 JK Tyre&Industries 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 JK Tyre&Industries 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 JK Tyre&Industries 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 JK Tyre&Industries needs to make to build a sustainable competitive advantage.