Va Tech Wabag Ltd (VATE) SWOT Analysis / TOWS Matrix / MBA Resources
Water Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Va Tech Wabag Ltd (India)
Based on various researches at Oak Spring University , Va Tech Wabag Ltd is operating in a macro-environment that has been destablized by – increasing energy prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Va Tech Wabag Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Va Tech Wabag Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Va Tech Wabag Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Va Tech Wabag 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 Va Tech Wabag Ltd can be done for the following purposes –
1. Strategic planning of Va Tech Wabag Ltd
2. Improving business portfolio management of Va Tech Wabag Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Water Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Va Tech Wabag Ltd
Strengths of Va Tech Wabag Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Va Tech Wabag Ltd are -
Diverse revenue streams
– Va Tech Wabag Ltd is present in almost all the verticals within the Water Utilities industry. This has provided Va Tech Wabag Ltd 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.
Learning organization
- Va Tech Wabag 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 Va Tech Wabag Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Va Tech Wabag Ltd emphasize – knowledge, initiative, and innovation.
High brand equity
– Va Tech Wabag Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Va Tech Wabag Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Va Tech Wabag Ltd is one of the leading players in the Water Utilities 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.
Ability to lead change in Water Utilities
– Va Tech Wabag Ltd is one of the leading players in the Water Utilities industry in India. Over the years it has not only transformed the business landscape in the Water Utilities industry in India but also across the existing markets. The ability to lead change has enabled Va Tech Wabag Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Va Tech Wabag Ltd is one of the most innovative firm in Water Utilities sector.
Effective Research and Development (R&D)
– Va Tech Wabag Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Va Tech Wabag Ltd staying ahead in the Water Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Va Tech Wabag Ltd in the Utilities sector have low bargaining power. Va Tech Wabag Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Va Tech Wabag Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Va Tech Wabag Ltd comprises – understanding the underlying the factors in the Water Utilities 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.
High switching costs
– The high switching costs that Va Tech Wabag 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.
Organizational Resilience of Va Tech Wabag Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Va Tech Wabag Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Va Tech Wabag Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Va Tech Wabag 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.
Weaknesses of Va Tech Wabag Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Va Tech Wabag Ltd are -
Capital Spending Reduction
– Even during the low interest decade, Va Tech Wabag 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 Water Utilities industry using digital technology.
Interest costs
– Compare to the competition, Va Tech Wabag Ltd 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.
No frontier risks strategy
– From the 10K / annual statement of Va Tech Wabag Ltd, it seems that company is thinking out the frontier risks that can impact Water Utilities 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.
Low market penetration in new markets
– Outside its home market of India, Va Tech Wabag Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Va Tech Wabag Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Utilities industry over the last five years. Va Tech Wabag Ltd 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 strategic competitive environment developments
– As Va Tech Wabag Ltd is one of the leading players in the Water Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Water Utilities industry in last five years.
Skills based hiring in Water Utilities industry
– The stress on hiring functional specialists at Va Tech Wabag 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.
High operating costs
– Compare to the competitors, Va Tech Wabag Ltd has high operating costs in the Water Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Va Tech Wabag Ltd lucrative customers.
Employees’ less understanding of Va Tech Wabag Ltd strategy
– From the outside it seems that the employees of Va Tech Wabag Ltd don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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 Va Tech Wabag Ltd supply chain. Even after few cautionary changes, Va Tech Wabag Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Va Tech Wabag Ltd vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Va Tech Wabag Ltd is dominated by functional specialists. It is not different from other players in the Water Utilities industry, but Va Tech Wabag Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Va Tech Wabag Ltd to focus more on services in the Water Utilities industry rather than just following the product oriented approach.
Va Tech Wabag Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Va Tech Wabag Ltd are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Va Tech Wabag Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Va Tech Wabag Ltd can develop new processes and procedures in Water Utilities 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Va Tech Wabag 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 Va Tech Wabag Ltd to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Va Tech Wabag Ltd has opened avenues for new revenue streams for the organization in Water Utilities industry. This can help Va Tech Wabag Ltd to build a more holistic ecosystem for Va Tech Wabag Ltd products in the Water Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Va Tech Wabag 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.
Loyalty marketing
– Va Tech Wabag Ltd 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.
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. Va Tech Wabag Ltd 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, Va Tech Wabag Ltd 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Va Tech Wabag Ltd can use these opportunities to build new business models that can help the communities that Va Tech Wabag Ltd operates in. Secondly it can use opportunities from government spending in Water Utilities sector.
Using analytics as competitive advantage
– Va Tech Wabag Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Water Utilities sector. This continuous investment in analytics has enabled Va Tech Wabag Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Va Tech Wabag Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Water Utilities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Va Tech Wabag Ltd in the Water Utilities industry. Now Va Tech Wabag Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Va Tech Wabag 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 Water Utilities industry.
Leveraging digital technologies
– Va Tech Wabag Ltd 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.
Threats Va Tech Wabag Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Va Tech Wabag Ltd are -
Consumer confidence and its impact on Va Tech Wabag 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 Water Utilities industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Utilities industry are lowering. It can presents Va Tech Wabag Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Utilities sector.
Technology acceleration in Forth Industrial Revolution
– Va Tech Wabag Ltd has witnessed rapid integration of technology during Covid-19 in the Water Utilities industry. As one of the leading players in the industry, Va Tech Wabag Ltd needs to keep up with the evolution of technology in the Water Utilities 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. Va Tech Wabag 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.
Increasing wage structure of Va Tech Wabag 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 Va Tech Wabag Ltd.
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. Va Tech Wabag Ltd needs to understand the core reasons impacting the Water Utilities industry. This will help it in building a better workplace.
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 Va Tech Wabag Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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.
Stagnating economy with rate increase
– Va Tech Wabag 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 Water Utilities industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Va Tech Wabag Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Water Utilities sector.
Regulatory challenges
– Va Tech Wabag Ltd 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 Water Utilities industry regulations.
Easy access to finance
– Easy access to finance in Water Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Va Tech Wabag Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Va Tech Wabag Ltd in Water Utilities industry. The Water Utilities 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.
Weighted SWOT Analysis of Va Tech Wabag Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Va Tech Wabag 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 Va Tech Wabag 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 Va Tech Wabag 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 Va Tech Wabag 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 Va Tech Wabag Ltd needs to make to build a sustainable competitive advantage.