Aurangabad Distillery (AURA) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Aurangabad Distillery (India)

Based on various researches at Oak Spring University , Aurangabad Distillery is operating in a macro-environment that has been destablized by – technology disruption, wage bills are increasing, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, challanges to central banks by blockchain based private currencies, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Aurangabad Distillery

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Aurangabad Distillery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aurangabad Distillery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aurangabad Distillery 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Aurangabad Distillery can be done for the following purposes –
1. Strategic planning of Aurangabad Distillery
2. Improving business portfolio management of Aurangabad Distillery
3. Assessing feasibility of the new initiative in India
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aurangabad Distillery

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Strengths of Aurangabad Distillery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Aurangabad Distillery are -

Sustainable margins compare to other players in industry

– Aurangabad Distillery has clearly differentiated products in the market place. This has enabled Aurangabad Distillery to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Aurangabad Distillery to invest into research and development (R&D) and innovation.

High brand equity

– Aurangabad Distillery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aurangabad Distillery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Training and development

– Aurangabad Distillery has one of the best training and development program in 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.

High switching costs

– The high switching costs that Aurangabad Distillery 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.

Highly skilled collaborators

– Aurangabad Distillery has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Aurangabad Distillery have helped the firm to develop new products and bring them quickly to the marketplace.

Digital Transformation in industry

- digital transformation varies from industry to industry. For Aurangabad Distillery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aurangabad Distillery 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)

– Aurangabad Distillery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Aurangabad Distillery staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management in the industry

– Aurangabad Distillery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the Aurangabad Distillery 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.

Low bargaining power of suppliers

– Suppliers of Aurangabad Distillery in the sector have low bargaining power. Aurangabad Distillery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aurangabad Distillery to manage not only supply disruptions but also source products at highly competitive prices.

Learning organization

- Aurangabad Distillery 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 Aurangabad Distillery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Aurangabad Distillery emphasize – knowledge, initiative, and innovation.

Diverse revenue streams

– Aurangabad Distillery is present in almost all the verticals within the industry. This has provided Aurangabad Distillery 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.

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Weaknesses of Aurangabad Distillery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Aurangabad Distillery are -

Slow to strategic competitive environment developments

– As Aurangabad Distillery is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

High dependence on Aurangabad Distillery ‘s star products

– The top 2 products and services of Aurangabad Distillery still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Aurangabad Distillery has relatively successful track record of launching new products.

Employees’ less understanding of Aurangabad Distillery strategy

– From the outside it seems that the employees of Aurangabad Distillery 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.

Products dominated business model

– Even though Aurangabad Distillery has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Aurangabad Distillery should strive to include more intangible value offerings along with its core products and services.

Compensation and incentives

– The revenue per employee of Aurangabad Distillery is just above the 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.

Need for greater diversity

– Aurangabad Distillery 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.

Interest costs

– Compare to the competition, Aurangabad Distillery 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.

Lack of clear differentiation of Aurangabad Distillery products

– To increase the profitability and margins on the products, Aurangabad Distillery needs to provide more differentiated products than what it is currently offering in the marketplace.

Capital Spending Reduction

– Even during the low interest decade, Aurangabad Distillery 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 industry using digital technology.

High operating costs

– Compare to the competitors, Aurangabad Distillery has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Aurangabad Distillery lucrative customers.

Aligning sales with marketing

– From the outside it seems that Aurangabad Distillery needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Aurangabad Distillery can leverage the sales team experience to cultivate customer relationships as Aurangabad Distillery is planning to shift buying processes online.

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Aurangabad Distillery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Aurangabad Distillery are -

Building a culture of innovation

– managers at Aurangabad Distillery 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 industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Aurangabad Distillery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Aurangabad Distillery 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.

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 Aurangabad Distillery 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. Aurangabad Distillery can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Aurangabad Distillery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Aurangabad Distillery is facing challenges because of the dominance of functional experts in the organization. Aurangabad Distillery can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Aurangabad Distillery in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Aurangabad Distillery has opened avenues for new revenue streams for the organization in industry. This can help Aurangabad Distillery to build a more holistic ecosystem for Aurangabad Distillery products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Aurangabad Distillery 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.

Leveraging digital technologies

– Aurangabad Distillery 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.

Buying journey improvements

– Aurangabad Distillery can improve the customer journey of consumers in the 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.

Using analytics as competitive advantage

– Aurangabad Distillery has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Aurangabad Distillery to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aurangabad Distillery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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Threats Aurangabad Distillery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Aurangabad Distillery are -

Consumer confidence and its impact on Aurangabad Distillery 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 industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Aurangabad Distillery 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 Aurangabad Distillery prominent markets.

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.

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 Aurangabad Distillery business can come under increasing regulations regarding data privacy, data security, etc.

Technology acceleration in Forth Industrial Revolution

– Aurangabad Distillery has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Aurangabad Distillery needs to keep up with the evolution of technology in the 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Aurangabad Distillery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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. Aurangabad Distillery 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 Aurangabad Distillery in industry. The 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. Aurangabad Distillery needs to understand the core reasons impacting the industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Aurangabad Distillery 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 industry.

Shortening product life cycle

– it is one of the major threat that Aurangabad Distillery is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Aurangabad Distillery may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.

High dependence on third party suppliers

– Aurangabad Distillery 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.

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Weighted SWOT Analysis of Aurangabad Distillery Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Aurangabad Distillery 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 Aurangabad Distillery 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 Aurangabad Distillery 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 Aurangabad Distillery 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 Aurangabad Distillery needs to make to build a sustainable competitive advantage.

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