As Mayo Schmidt's tenure as CEO of the Canadian-based agribusiness Viterra wound down before its sale to the Swiss-based commodity company Glencore, he reflected on his tenure, which had seen the firm grow from a Canadian-focused agricultural cooperative to an international agribusiness with operations across the globe, including significant operations in Australia. Now he wondered: What would the future hold for agriculture?
Swot Analysis of "Viterra" written by Ray A. Goldberg, Matthew Preble includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Viterra Agribusiness facing as an external strategic factors. Some of the topics covered in Viterra case study are - Strategic Management Strategies, Growth strategy, International business, Marketing, Organizational culture, Strategy execution and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Viterra casestudy better are - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
wage bills are increasing, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Viterra case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Viterra Agribusiness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Viterra Agribusiness 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 Viterra can be done for the following purposes –
1. Strategic planning using facts provided in Viterra case study
2. Improving business portfolio management of Viterra Agribusiness
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Viterra Agribusiness
Strengths Viterra | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Viterra Agribusiness in Viterra Harvard Business Review case study are -
Effective Research and Development (R&D)
– Viterra Agribusiness has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Viterra - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Viterra Agribusiness is present in almost all the verticals within the industry. This has provided firm in Viterra case study 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.
High switching costs
– The high switching costs that Viterra Agribusiness 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.
Training and development
– Viterra Agribusiness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Viterra Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Viterra Harvard Business Review case study comprises – understanding the underlying the factors in the 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.
Highly skilled collaborators
– Viterra Agribusiness has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Viterra HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Viterra Agribusiness has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Viterra Agribusiness to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– Viterra firm has clearly differentiated products in the market place. This has enabled Viterra Agribusiness to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Viterra Agribusiness to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Viterra Agribusiness has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Viterra Agribusiness 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.
Cross disciplinary teams
– Horizontal connected teams at the Viterra Agribusiness 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.
Analytics focus
– Viterra Agribusiness 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 industry. The technology infrastructure suggested by Ray A. Goldberg, Matthew Preble can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Viterra Agribusiness is one of the most innovative firm in sector. Manager in Viterra Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Viterra | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Viterra are -
Need for greater diversity
– Viterra Agribusiness 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Viterra, it seems that the employees of Viterra Agribusiness 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Viterra Agribusiness 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 decision making process
– As mentioned earlier in the report, Viterra Agribusiness has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Viterra Agribusiness 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.
Products dominated business model
– Even though Viterra Agribusiness has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Viterra should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Viterra Agribusiness, firm in the HBR case study Viterra needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Viterra Agribusiness supply chain. Even after few cautionary changes mentioned in the HBR case study - Viterra, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Viterra Agribusiness vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Viterra HBR case study mentions - Viterra Agribusiness 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.
Interest costs
– Compare to the competition, Viterra Agribusiness 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Viterra Agribusiness is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Viterra can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Viterra HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Viterra Agribusiness has relatively successful track record of launching new products.
Opportunities Viterra | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Viterra are -
Building a culture of innovation
– managers at Viterra Agribusiness 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 Leadership & Managing People segment.
Buying journey improvements
– Viterra Agribusiness can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Viterra suggest that firm 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Viterra Agribusiness in the consumer business. Now Viterra Agribusiness can target international markets with far fewer capital restrictions requirements than the existing system.
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. Viterra Agribusiness can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Viterra Agribusiness has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Viterra - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Viterra Agribusiness 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, Viterra Agribusiness is facing challenges because of the dominance of functional experts in the organization. Viterra case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Viterra Agribusiness 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Viterra Agribusiness 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Viterra Agribusiness in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Viterra Agribusiness can develop new processes and procedures in Leadership & Managing People 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.
Leveraging digital technologies
– Viterra Agribusiness 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.
Learning at scale
– Online learning technologies has now opened space for Viterra Agribusiness 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Viterra Agribusiness can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Viterra, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Viterra External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Viterra are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Viterra Agribusiness 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 prominent markets illustrated in HBR case study Viterra .
High dependence on third party suppliers
– Viterra Agribusiness 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.
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 Viterra Agribusiness business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Viterra Agribusiness
– 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 Viterra Agribusiness.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Viterra, Viterra Agribusiness may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Viterra Agribusiness.
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. Viterra Agribusiness 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.
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.
Technology acceleration in Forth Industrial Revolution
– Viterra Agribusiness has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Viterra Agribusiness needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Viterra Agribusiness can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Viterra Agribusiness needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Viterra Agribusiness 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 field.
Shortening product life cycle
– it is one of the major threat that Viterra Agribusiness is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Viterra Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Viterra 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 the case study Viterra 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 the Harvard case study Viterra 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 Viterra is 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 Viterra Agribusiness needs to make to build a sustainable competitive advantage.
