NIIT (NIIT) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for NIIT (India)
Based on various researches at Oak Spring University , NIIT is operating in a macro-environment that has been destablized by – wage bills are increasing, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NIIT can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NIIT, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NIIT 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 NIIT can be done for the following purposes –
1. Strategic planning of NIIT
2. Improving business portfolio management of NIIT
3. Assessing feasibility of the new initiative in India
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NIIT
Strengths of NIIT | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NIIT are -
Innovation driven organization
– NIIT is one of the most innovative firm in Schools sector.
Ability to recruit top talent
– NIIT is one of the leading players in the Schools 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.
Successful track record of launching new products
– NIIT has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NIIT 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.
Superior customer experience
– The customer experience strategy of NIIT in Schools industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of NIIT
– The covid-19 pandemic has put organizational resilience at the centre of everthing NIIT does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Schools industry
– NIIT has clearly differentiated products in the market place. This has enabled NIIT to fetch slight price premium compare to the competitors in the Schools industry. The sustainable margins have also helped NIIT to invest into research and development (R&D) and innovation.
Training and development
– NIIT has one of the best training and development program in Services 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.
Low bargaining power of suppliers
– Suppliers of NIIT in the Services sector have low bargaining power. NIIT has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NIIT to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For NIIT digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NIIT 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.
Cross disciplinary teams
– Horizontal connected teams at the NIIT 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.
Effective Research and Development (R&D)
– NIIT has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – NIIT staying ahead in the Schools industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of NIIT comprises – understanding the underlying the factors in the Schools 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 NIIT | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NIIT are -
High dependence on NIIT ‘s star products
– The top 2 products and services of NIIT still accounts for major business revenue. This dependence on star products in Schools industry has resulted into insufficient focus on developing new products, even though NIIT has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of India, NIIT needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, NIIT has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Schools industry over the last five years. NIIT 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.
Increasing silos among functional specialists
– The organizational structure of NIIT is dominated by functional specialists. It is not different from other players in the Schools industry, but NIIT needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NIIT to focus more on services in the Schools industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As NIIT is one of the leading players in the Schools industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Schools industry in last five years.
High bargaining power of channel partners in Schools industry
– because of the regulatory requirements in India, NIIT 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 Schools industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, NIIT is slow explore the new channels of communication. These new channels of communication can help NIIT to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– NIIT has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, NIIT 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 Schools industry using digital technology.
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 NIIT supply chain. Even after few cautionary changes, NIIT is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left NIIT vulnerable to further global disruptions in South East Asia.
Skills based hiring in Schools industry
– The stress on hiring functional specialists at NIIT 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.
NIIT Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NIIT are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Schools industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. NIIT 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. NIIT can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– NIIT can develop new processes and procedures in Schools 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.
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. NIIT can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NIIT can use these opportunities to build new business models that can help the communities that NIIT operates in. Secondly it can use opportunities from government spending in Schools sector.
Using analytics as competitive advantage
– NIIT has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Schools sector. This continuous investment in analytics has enabled NIIT to build a competitive advantage using analytics. The analytics driven competitive advantage can help NIIT to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, NIIT 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.
Better consumer reach
– The expansion of the 5G network will help NIIT to increase its market reach. NIIT 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, NIIT is facing challenges because of the dominance of functional experts in the organization. NIIT can utilize new technology in the field of Schools industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of NIIT has opened avenues for new revenue streams for the organization in Schools industry. This can help NIIT to build a more holistic ecosystem for NIIT products in the Schools industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NIIT 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 NIIT to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Schools industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for NIIT in the Schools industry. Now NIIT can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects NIIT can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– NIIT can improve the customer journey of consumers in the Schools 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 NIIT External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NIIT are -
Stagnating economy with rate increase
– NIIT 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 Schools industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for NIIT in Schools industry. The Schools 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. NIIT needs to understand the core reasons impacting the Schools industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Schools industry are lowering. It can presents NIIT with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Schools sector.
Shortening product life cycle
– it is one of the major threat that NIIT is facing in Schools 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, NIIT 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 NIIT prominent markets.
High dependence on third party suppliers
– NIIT 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.
Easy access to finance
– Easy access to finance in Schools industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. NIIT can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on NIIT 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 Schools industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NIIT may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Schools sector.
Regulatory challenges
– NIIT 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 Schools industry regulations.
Increasing wage structure of NIIT
– 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 NIIT.
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 NIIT.
Weighted SWOT Analysis of NIIT Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NIIT 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 NIIT 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 NIIT 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 NIIT 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 NIIT needs to make to build a sustainable competitive advantage.