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 – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing household debt because of falling income levels, increasing transportation and logistics costs, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
Innovation driven organization
– JK Tyre&Industries is one of the most innovative firm in Tires sector.
High brand equity
– JK Tyre&Industries has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled JK Tyre&Industries to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Tires industry
- digital transformation varies from industry to industry. For JK Tyre&Industries digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. JK Tyre&Industries 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.
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.
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.
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.
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.
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.
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.
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.
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.
Analytics focus
– JK Tyre&Industries 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 Tires 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.
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 -
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.
Aligning sales with marketing
– From the outside it seems that JK Tyre&Industries needs to have more collaboration between its sales team and marketing team. Sales professionals in the Tires industry have deep experience in developing customer relationships. Marketing department at JK Tyre&Industries can leverage the sales team experience to cultivate customer relationships as JK Tyre&Industries is planning to shift buying processes online.
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.
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.
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.
Slow to strategic competitive environment developments
– As JK Tyre&Industries is one of the leading players in the Tires industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Tires industry in last five years.
Compensation and incentives
– The revenue per employee of JK Tyre&Industries is just above the Tires 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.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of JK Tyre&Industries is dominated by functional specialists. It is not different from other players in the Tires industry, but JK Tyre&Industries needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help JK Tyre&Industries to focus more on services in the Tires industry rather than just following the product oriented approach.
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 -
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Tires industry, but it has also influenced the consumer preferences. JK Tyre&Industries can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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. JK Tyre&Industries can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, JK Tyre&Industries 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects JK Tyre&Industries can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, JK Tyre&Industries can use these opportunities to build new business models that can help the communities that JK Tyre&Industries operates in. Secondly it can use opportunities from government spending in Tires sector.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Tires industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. JK Tyre&Industries 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. JK Tyre&Industries 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, JK Tyre&Industries 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 JK Tyre&Industries 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 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 -
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.
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.
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 JK Tyre&Industries business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– JK Tyre&Industries 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. JK Tyre&Industries can take advantage of this fund but it will also bring new competitors in the Tires industry.
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.
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 JK Tyre&Industries.
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 JK Tyre&Industries in the Tires sector and impact the bottomline of the organization.
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.
Stagnating economy with rate increase
– JK Tyre&Industries 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 Tires industry.
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.
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.
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.
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 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.