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 – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, 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 -
Digital Transformation in Water Utilities industry
- digital transformation varies from industry to industry. For Va Tech Wabag Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Va Tech Wabag Ltd 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.
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.
Training and development
– Va Tech Wabag Ltd has one of the best training and development program in Utilities 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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Va Tech Wabag Ltd 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.
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.
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.
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.
Highly skilled collaborators
– Va Tech Wabag Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Utilities industry. Secondly the value chain collaborators of Va Tech Wabag Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
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 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.
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 -
Ability to respond to the competition
– As the decision making is very deliberative at Va Tech Wabag Ltd, in the dynamic environment of Water Utilities industry it has struggled to respond to the nimble upstart competition. Va Tech Wabag Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Va Tech Wabag Ltd is slow explore the new channels of communication. These new channels of communication can help Va Tech Wabag Ltd to provide better information regarding Water Utilities products and services. It can also build an online community to further reach out to potential customers.
High dependence on Va Tech Wabag Ltd ‘s star products
– The top 2 products and services of Va Tech Wabag Ltd still accounts for major business revenue. This dependence on star products in Water Utilities industry has resulted into insufficient focus on developing new products, even though Va Tech Wabag Ltd has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Water Utilities industry, Va Tech Wabag Ltd needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
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.
High bargaining power of channel partners in Water Utilities industry
– because of the regulatory requirements in India, Va Tech Wabag Ltd 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 Water Utilities industry.
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.
Products dominated business model
– Even though Va Tech Wabag Ltd has some of the most successful models in the Water Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Va Tech Wabag Ltd should strive to include more intangible value offerings along with its core products and services.
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 -
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Va Tech Wabag Ltd 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.
Better consumer reach
– The expansion of the 5G network will help Va Tech Wabag Ltd to increase its market reach. Va Tech Wabag Ltd 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 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Va Tech Wabag Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Utilities industry, and it will provide faster access to the consumers.
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.
Manufacturing automation
– Va Tech Wabag Ltd can use the latest technology developments to improve its manufacturing and designing process in Water Utilities 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Water Utilities industry, but it has also influenced the consumer preferences. Va Tech Wabag Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
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.
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.
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 Va Tech Wabag Ltd.
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.
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.
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.
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.
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.
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.
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.
Environmental challenges
– Va Tech Wabag Ltd 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. Va Tech Wabag Ltd can take advantage of this fund but it will also bring new competitors in the Water Utilities industry.
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.
High dependence on third party suppliers
– Va Tech Wabag Ltd 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.
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.