In our previous article, we had done a detailed SWOT analysis of Enel, an Italian Multinational Electricity & Gas Utility Company. In this article, we are going to explain the SWOT analysis of SKF India.
SKF India is a leading ball bearing, cylindrical roller bearings, and spherical roller bearing and wheel bearings manufacturer set up in Kolkata, India.
Another characteristic that made SKF India renowned is its marketing actions. Since the world goes online, marketing is transforming its aspects. Are you curious about learning the latest marketing techniques? Check out our Free MasterClass on Digital Marketing 101 by Karan Shah, the CEO and Founder of IIDE.
Now, we will discover strengths, weaknesses, opportunities and threats covering SKF India. Before we delve into the SWOT analysis of SKF India let’s learn about the company, its history, products, services and competitors.
About SKF India,
The company was incorporated in 1923 as a vast producer of ball bearings, cylindrical roller bearings, and spherical roller bearing and wheel bearings. The products were sold under the brand name SKF. The manufacturing plant is located in Kolkata.
SKF India has 3 manufacturing facilities located in Pune, Bangalore and Haridwar, with 11 sales offices across India and a supplier network of over 300 distributors. Components such as front accessory drive systems, chain drive systems, valve trains, shift systems and a range of needle roller bearings and elements are produced.
The company also achieved breakthroughs in friction reduction, energy efficiency, and equipment longevity and reliability. The company produces clutch systems and dual-mass flywheels for passenger cars, light commercial vehicles, heavy commercial vehicles and tractors. SKF India is a leading automotive and industrial engineered solution through its five technology-centric platforms: bearings and units, seals, mechatronics, lubrication solutions and services.
|No. of Employees||2600+|
|Market Cap||Rs 16,632.41 Crore (2022)|
|Annual Revenue||Rs 966.98 Crore (2021)|
|Net Income/ Profit||Rs 88.79 Crore (2021)|
Products of SKF India
SKF India has been a global marketer since 1923 and deals in the following businesses:
- Automotive Technologies
- Automotive Aftermarket
- Special Machinery
- Digital Products
Competitors of SKF India
Competition among businesses may lead to the development of new or improved goods, as well as more efficient operations. SKF India has a few major rival companies around the globe. Some of the top competitors are
- Progress-Werk Oberkirch
- Schaeffler India
Now that we know about the company’s history, its products, and its close competitors, we can move on to the SWOT analysis of SKF India.
SWOT Analysis of SKF India
A SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like SKF India to compare its business and performance to that of its competitors.
It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of SKF India.
To better understand the SWOT analysis of SKF India, refer to the infographics below:
Below is an explicit guide to the SWOT analysis of SKF India.
Strengths of SKF India
SKF India, being one of the leading companies in its industry, has several benefits that help it flourish in the marketplace. These strengths not only help it retain market share in existing areas but also help it break into new ones.
- Strong Free Cash Flow: There is a strong free cash flow that puts resources into the hands of the company to expand into new projects.
- Good ROI: It is relatively successful in new projects and provides a high return on capital expenditures through the creation of new revenue streams.
- Strong Brand Portfolio: Over the years SKF India has invested in building a strong brand portfolio. This brand portfolio can be very useful if an organisation wants to expand into new product categories.
- Outstanding Performance in New Markets: SKF India has accumulated experience to enter new markets and achieve success. The expansion has helped organisations create new revenue streams and diversify business cycle risks in the markets in which they operate.
- Highly Skilled Labour: Highly skilled workforce through successful education and training programs. By investing enormous resources in the training and development of SKF India employees, they not only create highly qualified employees but also motivate them to achieve more.
- Mergers and Acquisitions: A track record of successfully integrating additional companies through mergers and acquisitions. Over the past few years, he has successfully integrated several technology companies to optimise operations and establish a stable supply chain.
Weaknesses of SKF India
Strategy is all about choices and weaknesses are areas where companies can improve through SWOT analysis and leverage their competitive advantage and strategic positioning.
- More Investment is Needed in New Technologies: Given the scale of the expansion and the multiple geographic regions in which the company will expand, SKF India’s overall integrating processes require more money to be invested in technology. Current investments in technology are not aligned with the company’s vision.
- Financial Planning is Not Being Performed Properly and Efficiently: The liquid asset ratio and liquidity ratio indicate that a company can use its cash more efficiently than it currently is.
- High Labour Outflow: With higher dropout rates compared to other organisations in the industry, SKF India, and has to spend significantly more on employee training and development than its competitors.
- Not Very Successful in Integrating Companies with Different Work Cultures: As mentioned earlier, SKF India is successful at integrating small companies. It has its share of failures to merge firms that have different work cultures.
- High Competition: The daily stock is high compared to its competitors, so the company has to raise more capital to invest in the channel. This could affect the long-term growth of SKF India.
- Product Marketing: Although the product is successful in terms of sales, its positioning and unique selling proposition are not clearly defined, making it vulnerable to attack from competitors in this sector.
Opportunities for SKF India
Opportunities are potential areas for companies to focus on to improve results, increase sales, and ultimately profit.
- New Environmental Policy: New opportunities will create a level playing field for everyone in the industry. This is a great opportunity for SKF India, Inc. to realise the benefits of new technologies and gain market share in new product categories.
- New Taxation Policy: New tax policies can have a significant impact on the way SKF India does business and open up new opportunities for them to increase its profitability.
- Open New Markets Through Government Agreements: New technology standards and government free trade agreements provided to SKF India open up opportunities for SKF India to enter newly developed markets.
- New Customers Through Online Channels: The company has invested huge amounts of money in its online platform over the past few years. This investment opened up a new sales channel for SKF India. Over the next few years, companies will be able to seize this opportunity by better understanding their customers and meeting their needs through big data analytics.
- Economic Recovery: Economic recovery and rising consumer spending after years of recession and slow industrial growth are opportunities for SKF India to attract new customers and increase market share.
Threats to SKF India
Threats are environmental factors that can harm a company’s development. Here are some of SKF India’s threats:
- Legal Actions: The company may face legal action in other markets given the continuing fluctuations in different laws and product standards in those markets.
- Fierce Competition: Strong profitability has increased the number of players in the industry over the past two years, putting downward pressure on overall revenue as well as profitability.
- Liability Laws: Vary from country to country SKF India may face a variety of liability claims as a result of these market policy changes.
- Quantitative Increases in Commodities: This could jeopardise SKF India’s profitability. A shortage of skilled labour in certain global markets threatens SKF India’s continued earnings growth in the market.
- Operates Globally: Because the company operates in many countries, it is exposed to currency fluctuations, especially given the unstable political environment in many markets around the world. This may face some challenges in the market and may result in some losses as well.
This ends our elaborative SWOT analysis of SKF India. Let us conclude our learning below.
SKF India is well-known for ball & roller bearing manufacturing with significant global positions. During the SWOT analysis of SKF India, we found that the company is highly dependent and enjoys strong brand awareness and trust from its customers. It has a solid logistic base and covers all markets it serves, but suffers from more active research and development from an increasing number of manufacturers and competitors in the same space.
But being such a huge brand across multiple countries, SKF India should continue to innovate and develop more products and launch them in the market with the best possible marketing strategies.
Especially digital marketing which is vital in today’s growing and expanding world, to get better results and to remain competitive in the market. If you don’t have any idea of what digital marketing is or want to learn more about it and upgrade yourself, here is IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
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