SWOT Analysis Bharti Airtel

Strengths

• Bharti Airtel has more than 65 million customers (July 2008). It is the largest

cellular provider in India, and also supplies broadband and telephone services - as

well as many other telecommunications services to both domestic and corporate

customers.

• Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel,

with whom they hold a strategic alliance. This means that the business has access

to knowledge and technology from other parts of the telecommunications world.

• The company has covered the entire Indian nation with its network. This has

underpinned its large and rising customer base.

Weaknesses

• An often cited original weakness is that when the business was started by Sunil

Bharti Mittal over 15 years ago, the business has little knowledge and experience

of how a cellular telephone system actually worked. So the start-up business had

to outsource to industry experts in the field.

• Until recently Airtel did not own its own towers, which was a particular strength

of some of its competitors such as Hutchison Essar. Towers are important if your

company wishes to provide wide coverage nationally.

• The fact that the Airtel has not pulled off a deal with South Africa's MTN could

signal the lack of any real emerging market investment opportunity for the

business once the Indian market has become mature.

Opportunities

• The company possesses a customized version of the Google search engine which

will enhance broadband services to customers. The tie-up with Google can only

enhance the Airtel brand, and also provides advertising opportunities in Indian for

Google.

• Global telecommunications and new technology brands see Airtel as a key

strategic player in the Indian market. The new iPhone will be launched in India

via an Airtel distributorship. Another strategic partnership is held with

BlackBerry Wireless Solutions.

• Despite being forced to outsource much of its technical operations in the early

days, this allowed Airtel to work from its own blank sheet of paper, and to

question industry approaches and practices - for example replacing the Revenue-

Per-Customer model with a Revenue-Per-Minute model which is better suited to

India, as the company moved into small and remote villages and towns.

• The company is investing in its operation in 120,000 to 160,000 small villages

every year. It sees that less well-off consumers may only be able to afford a few

tens of Rupees per call, and also so that the business benefits are scalable - using

its 'Matchbox' strategy.

• Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea

Cellular to create a new independent tower company called Indus Towers. This

new business will control more than 60% of India's network towers. IPTV is

another potential new service that could underpin the company's long-term

strategy.

Threats

• Airtel and Vodafone seem to be having an on/off relationship. Vodafone which

owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead

invested in its rival Hutchison Essar. Knowledge and technology previously

available to Airtel now moves into the hands of one of its competitors.

• The quickly changing pace of the global telecommunications industry could tempt

Airtel to go along the acquisition trail which may make it vulnerable if the world

goes into recession. Perhaps this was an impact upon the decision not to proceed

with talks about the potential purchase of South Africa's MTN in May 2008. This

opened the door for talks between Reliance Communication's Anil Ambani and

MTN, allowing a competing Inidan industrialist to invest in the new emerging

African telecommunications market.

• Bharti Airtel could also be the target for the takeover vision of other global

telecommunications players that wish to move into the Indian market.

SWOT Analysis ITC.

ITC is one of India's biggest and best-known private sector companies. In fact it is one

of the World's most high profile consumer operations. Its businesses and brands are

focused almost entirely on the Indian markets, and despite being most well-known for

its tobacco brands such as Gold Flake, the business is now diversifying into new FMCG

(Fast Moving Consumer Goods) brands in a number of market sectors - including

cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded

apparel, personal care, greetings cards, Information Technology, safety matches,

incense sticks and stationery. Examples of its successful new FMCG products include:

• Aashirvaad - India's most popular atta brand with over 50% market share. It is

also present in spices and instant mixes.

• Mint-o - Mint-0 Fresh is the largest cough lozenge brand in India.

• Bingo! - a new introduction of finger snacks.

• Kitchens of India - pre-prepared foods designed by ITC's master chefs.

• Sunfeast - is ITC's biscuit brand (and the sub-brand is also used on some pasta

products).

Strengths

• ITC leveraged it traditional businesses to develop new brands for new segments.

For example, ITC used its experience of transporting and distributing tobacco

products to remote and distant parts of India to the advantage of its FMCG

products. ITC master chefs from its hotel chain are often asked to develop new

food concepts for its FMCG business.

• ITC is a diversified company trading in a number of business sectors including

cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded

apparel, personal care, greetings cards, Information Technology, safety matches,

incense sticks and stationery.

Weaknesses

• The company's original business was traded in tobacco. ITC stands for Imperial

Tobacco Company of India Limited. It is interesting that a business that is now

so involved in branding continues to use its original name, despite the negative

connection of tobacco with poor health and premature death.

• To fund its cash guzzling FMCG start-up, the company is still dependant upon

its tobacco revenues. Cigarettes account for 47 per cent of the company's

turnover, and that in itself is responsible for 80% of its profits. So there is an

argument that ITC's move into FMCG (Fast Moving Consumer Goods) is being

subsidized by its tobacco operations. Its Gold Flake tobacco brand is the largest

FMCG brand in India - and this single brand alone holds 70% of the tobacco

market.

Opportunities

• Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can

be developed using strategies of market development, product development and

marketing penetration.

• ITC is moving into new and emerging sectors including Information

Technology, supporting business solutions.

• e-Choupal is a community of practice that links rural Indian farmers using the

Internet. This is an original and well thought of initiative that could be used in

other sectors in many other parts of the world. It is also an ambitious project that

has a goal of reaching 10 million farmers in 100,000 villages. Take a look at

eChoupal here http://www.itcportal.com/agri_exports/e-choupal_new.htm

• ITC leverages e-Choupal in a novel way. The company researched the tastes of

consumers in the North, West and East of India of atta (a popular type of wheat

flour), then used the network to source and create the raw materials from

farmers and then blend them for consumers under purposeful brand names such

as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the

Western market and Aashirvaad in the Eastern market. This concept is

tremendously difficult for competitors to emulate.

• Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate

into the country's premier FMCG business.

• Per capita consumption of personal care products in India is the lowest in the

world offering an opportunity for ITC's soaps, shampoos and fragrances under

their Wills brand.

Threats

• The obvious threat is from competition, both domestic and international. The

laws of economics dictate that if competitors see that there is a solid profit to be

made in an emerging consumer society that ultimately new products and

services will be made available. Western companies will see India as an exciting

opportunity for themselves to find new market segments for their own offerings.

SWOT Analysis Nike, Inc.

Strengths

• Nike is a very competitive organization. Phil Knight (Founder and CEO) is often

quoted as saying that 'Business is war without bullets.' Nike has a healthy dislike

of is competitors. At the Atlanta Olympics, Reebok went to the expense of

sponsoring the games. Nike did not. However Nike sponsored the top athletes and

gained valuable coverage.

• Nike has no factories. It does not tie up cash in buildings and manufacturing

workers. This makes a very lean organization. Nike is strong at research and

development, as is evidenced by its evolving and innovative product range. They

then manufacture wherever they can produce high quality product at the lowest

possible price. If prices rise, and products can be made more cheaply elsewhere

(to the same or better specification), Nike will move production.

• Nike is a global brand. It is the number one sports brand in the World. Its famous

'Swoosh' is instantly recognizable, and Phil Knight even has it tattooed on his

ankle.

Weaknesses

• The organization does have a diversified range of sports products. However, the

income of the business is still heavily dependent upon its share of the footwear

market. This may leave it vulnerable if for any reason its market share erodes.

• The retail sector is very price sensitive. Nike does have its own retailer in Nike

Town. However, most of its income is derived from selling into retailers.

Retailers tend to offer a very similar experience to the consumer. Can you tell one

sports retailer from another? So margins tend to get squeezed as retailers try to

pass some of the low price competition pressure onto Nike.

Opportunities

• Product development offers Nike many opportunities. The brand is fiercely

defended by its owners whom truly believe that Nike is not a fashion brand.

However, like it or not, consumers that wear Nike product do not always buy it to

participate in sport. Some would argue that in youth culture especially, Nike is a

fashion brand. This creates its own opportunities, since product could become

unfashionable before it wears out i.e. consumers need to replace shoes.

• There is also the opportunity to develop products such as sport wear, sunglasses

and Jewellery. Such high value items do tend to have associated with them, high

profits.

• The business could also be developed internationally, building upon its strong

global brand recognition. There are many markets that have the disposable

income to spend on high value sports goods. For example, emerging markets such

as China and India have a new richer generation of consumers. There are also

global marketing events that can be utilized to support the brand such as the

World Cup (soccer) and The Olympics.

Threats

• Nike is exposed to the international nature of trade. It buys and sells in different

currencies and so costs and margins are not stable over long periods of time. Such

an exposure could mean that Nike may be manufacturing and/or selling at a loss.

This is an issue that faces all global brands.

• The market for sports shoes and garments is very competitive. The model

developed by Phil Knight in his Stamford Business School days (high value

branded product manufactured at a low cost) is now commonly used and to an

extent is no longer a basis for sustainable competitive advantage. Competitors are

developing alternative brands to take away Nike's market share.

• As discussed above in weaknesses, the retail sector is becoming price

competitive. This ultimately means that consumers are shopping around for a

better deal. So if one store charges a price for a pair of sports shoes, the consumer

could go to the store along the street to compare prices for the exactly the same

item, and buy the cheaper of the two. Such consumer price sensitivity is a

potential external threat to Nike.

Application of the TOWS Matrix to Volkswagen

Volkswagen (VW) was a successful company that experienced great difficulties in the

early 1970s, but then developed a strategy that resulted in an excellent market position in

the late 1970s. The TOWS Matrix shown in Figure 1 will focus on the crucial period

from late 1973 to early 1975. The external threats and opportunities pertain mostly to the

situation VW faced in the United States, but a similar situation prevailed in Europe at that

time.

Weaknesses and Threats (WT)

A company with great weaknesses often has to resort to a survival strategy. VW could

have seriously considered the option of a joint operation with Chrysler or American

Motors. Another alternative would have been to withdraw from the American market

altogether.

Although in difficulties VW did not have to resort to a survival strategy because the

company still had much strength. Consequently, a more appropriate strategy was to

attempt to overcome the weaknesses and develop them into strengths. In other words, the

direction was toward the strength-opportunity position (SO) in the matrix shown.

Specifically, the strategy was to reduce the competitive threat by developing a more

flexible new product line that would accommodate the needs and desires of the car-

buying public.

Weaknesses and Opportunities (WO)

The growing affluence of customers has resulted in 'trading up' to more luxurious cars.

Yet, VW had essentially followed a one-model policy which presented a problem when

the design of the Beetle became obsolete A new model line had to be introduced to reach

a wider spectrum of buyers. In order to minimize the additional costs of a multi product

line, the building block principle was employed in the design of the new cars. This

allowed using the same parts for different models that ranged from the relatively low-

priced Rabbit to the higher priced Audi line.

Another weakness at VW was the rising costs in Germany. For example, in 1973 wages

and salaries rose 19 per cent over the previous year. Similarly, increased fuel costs made

the shipping of cars to the United States more costly. This situation favored setting up an

assembly plant in the United States. However, this also created some problems for VW

because it had no experience in dealing with American organized labor. To overcome this

weakness, VW's tactic was to recruit managers from Detroit who were capable of

establishing good union relations.

Strengths and Threats (ST)

One of the greatest threats to VW was the continuing appreciation of the Deutsche Mark

against the dollar. For example, from October 1972 to November 1973 the mark

appreciated 35 percent. This meant higher prices for the buyer. The result, of course, was

a less competitive posture. Japanese and American automakers obtained an increasingly

larger share of the small-car market. To reduce the threats of competition and the effects

of the unfavorable exchange rate, VW was forced to build an assembly plant in the

United States.

Another strategy for meeting competitive pressures was to build on VW's strengths by

developing a car based on advanced-design technology. The result of this effort was the

Rabbit, a model with features later adopted by many other car manufacturers.

The oil crisis in 1973-1974 not only caused a fuel shortage, but also price rises, a trend

that has continued. To meet this threat, VW used its technological capabilities not only to

improve its engines (through the use of fuel injection, for examples), but also to develop

the very fuel-efficient Diesel engine. This tactic, which was congruent with its general

strategy, helped improve the firm’s market position.

Strengths and Opportunities (SO)

In general, successful firms build on their strengths to take advantage of opportunities.

VW is no exception. Throughout this discussion VW's strengths in research,

development, engineering, and its experience m production technology became evident.

These strengths, under the leadership of Rudolf Leiding, enabled the company to develop

a product line that met market demands for an economical car (the Rabbit, successor to

the Beetle), as well as the tastes for more luxurious cars with many available options

(Scirocco and the Audi line).

Eventually the same company's strengths enabled VW to plan and build the assembly

facility in New Stanton, Pennsylvania. Thus, YW could benefit from substantial

concessions granted by the state government to attract VW which, in turn, provided many

employment opportunities.

In another tactical move, VW manufactured and sold small engines to Chrysler and

American Motors. These companies urgently needed small engines for installation in

their own cars and revenues from these sales improved the financial position of VW.