Rane Engine Valves Ltd (RAEV) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Rane Engine Valves Ltd (India)
Based on various researches at Oak Spring University , Rane Engine Valves Ltd is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, technology disruption, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Rane Engine Valves Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Rane Engine Valves Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rane Engine Valves Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rane Engine Valves 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 Rane Engine Valves Ltd can be done for the following purposes –
1. Strategic planning of Rane Engine Valves Ltd
2. Improving business portfolio management of Rane Engine Valves Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rane Engine Valves Ltd
Strengths of Rane Engine Valves Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rane Engine Valves Ltd are -
Training and development
– Rane Engine Valves Ltd 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.
Low bargaining power of suppliers
– Suppliers of Rane Engine Valves Ltd in the Consumer Cyclical sector have low bargaining power. Rane Engine Valves Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rane Engine Valves Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Rane Engine Valves Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Rane Engine Valves Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Rane Engine Valves Ltd is one of the most innovative firm in Auto & Truck Parts sector.
Superior customer experience
– The customer experience strategy of Rane Engine Valves Ltd in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Rane Engine Valves Ltd 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 Auto & Truck Parts 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.
Learning organization
- Rane Engine Valves 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 Rane Engine Valves Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Rane Engine Valves Ltd emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Rane Engine Valves Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rane Engine Valves 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.
Strong track record of project management in the Auto & Truck Parts industry
– Rane Engine Valves Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Rane Engine Valves Ltd is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Rane Engine Valves 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.
Cross disciplinary teams
– Horizontal connected teams at the Rane Engine Valves 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.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Rane Engine Valves Ltd has clearly differentiated products in the market place. This has enabled Rane Engine Valves Ltd to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Rane Engine Valves Ltd to invest into research and development (R&D) and innovation.
Weaknesses of Rane Engine Valves Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rane Engine Valves Ltd are -
High dependence on Rane Engine Valves Ltd ‘s star products
– The top 2 products and services of Rane Engine Valves Ltd still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Rane Engine Valves Ltd has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Rane Engine Valves Ltd has high operating costs in the Auto & Truck Parts industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Rane Engine Valves Ltd lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Rane Engine Valves Ltd is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Rane Engine Valves Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rane Engine Valves Ltd to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Rane Engine Valves 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 Auto & Truck Parts industry over the last five years. Rane Engine Valves 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.
High bargaining power of channel partners in Auto & Truck Parts industry
– because of the regulatory requirements in India, Rane Engine Valves 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 Auto & Truck Parts industry.
Ability to respond to the competition
– As the decision making is very deliberative at Rane Engine Valves Ltd, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Rane Engine Valves Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Rane Engine Valves Ltd is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
Employees’ less understanding of Rane Engine Valves Ltd strategy
– From the outside it seems that the employees of Rane Engine Valves 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.
Lack of clear differentiation of Rane Engine Valves Ltd products
– To increase the profitability and margins on the products, Rane Engine Valves Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rane Engine Valves Ltd is slow explore the new channels of communication. These new channels of communication can help Rane Engine Valves Ltd to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Rane Engine Valves Ltd has a high cash cycle compare to other players in the Auto & Truck Parts industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Rane Engine Valves Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Rane Engine Valves Ltd are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Parts industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rane Engine Valves Ltd 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. Rane Engine Valves Ltd 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.
Leveraging digital technologies
– Rane Engine Valves 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.
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. Rane Engine Valves Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Rane Engine Valves Ltd to increase its market reach. Rane Engine Valves 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.
Manufacturing automation
– Rane Engine Valves Ltd can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rane Engine Valves 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 Auto & Truck Parts industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Rane Engine Valves Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rane Engine Valves 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 Rane Engine Valves Ltd to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Rane Engine Valves 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 Rane Engine Valves Ltd has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Rane Engine Valves Ltd to build a more holistic ecosystem for Rane Engine Valves Ltd products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Rane Engine Valves Ltd can develop new processes and procedures in Auto & Truck Parts 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.
Using analytics as competitive advantage
– Rane Engine Valves Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Rane Engine Valves Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rane Engine Valves Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rane Engine Valves Ltd is facing challenges because of the dominance of functional experts in the organization. Rane Engine Valves Ltd can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Rane Engine Valves Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Rane Engine Valves Ltd are -
Regulatory challenges
– Rane Engine Valves 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 Auto & Truck Parts industry regulations.
Technology acceleration in Forth Industrial Revolution
– Rane Engine Valves Ltd has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Rane Engine Valves Ltd needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
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 Rane Engine Valves 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. Rane Engine Valves Ltd needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Rane Engine Valves 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 Auto & Truck Parts industry.
Environmental challenges
– Rane Engine Valves 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. Rane Engine Valves Ltd can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Rane Engine Valves Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
Consumer confidence and its impact on Rane Engine Valves 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 Auto & Truck Parts industry and other sectors.
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.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rane Engine Valves Ltd 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, Rane Engine Valves 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 Auto & Truck Parts sector.
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 Rane Engine Valves Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rane Engine Valves Ltd 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 Rane Engine Valves Ltd prominent markets.
Weighted SWOT Analysis of Rane Engine Valves Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Rane Engine Valves 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 Rane Engine Valves 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 Rane Engine Valves 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 Rane Engine Valves 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 Rane Engine Valves Ltd needs to make to build a sustainable competitive advantage.