International Agribusiness in China: Charoen Pokphand Group SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of International Agribusiness in China: Charoen Pokphand Group
The world's leading Thai agribusiness corporation and largest agribusiness investor in China, CP Group, is facing another crossroads in China as the country starts to undergo rural reform. The issues at hand for Chairman Dhanin Chearavanont is how CP can balance its place as a key investor in China's burgeoning agriculture market with its unstated obligation to also provide guidance and expertise in food safety, technology, as well as jobs for rural farmers while still competing against the growing cadre of international and domestic companies vying to grab share from its operations in China. Was rural reform going to help or hinder CP's position in China and was CP doing all it could to take advantage of these changes?
Authors :: William C. Kirby, Michael Shih-ta Chen, Tracy Yuen Manty, Yi Kwan Chu
Swot Analysis of "International Agribusiness in China: Charoen Pokphand Group" written by William C. Kirby, Michael Shih-ta Chen, Tracy Yuen Manty, Yi Kwan Chu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cp Agribusiness facing as an external strategic factors. Some of the topics covered in International Agribusiness in China: Charoen Pokphand Group case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the International Agribusiness in China: Charoen Pokphand Group casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, cloud computing is disrupting traditional business models, technology disruption, there is backlash against globalization, increasing energy prices, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of International Agribusiness in China: Charoen Pokphand Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in International Agribusiness in China: Charoen Pokphand Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cp Agribusiness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cp 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 International Agribusiness in China: Charoen Pokphand Group can be done for the following purposes –
1. Strategic planning using facts provided in International Agribusiness in China: Charoen Pokphand Group case study
2. Improving business portfolio management of Cp 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 Cp Agribusiness
Strengths International Agribusiness in China: Charoen Pokphand Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cp Agribusiness in International Agribusiness in China: Charoen Pokphand Group Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Cp Agribusiness digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cp Agribusiness 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.
High brand equity
– Cp Agribusiness has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cp 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
– International Agribusiness in China: Charoen Pokphand Group firm has clearly differentiated products in the market place. This has enabled Cp Agribusiness to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Cp Agribusiness to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Cp Agribusiness has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cp 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.
Training and development
– Cp Agribusiness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in International Agribusiness in China: Charoen Pokphand Group 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.
Learning organization
- Cp Agribusiness 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 Cp Agribusiness is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in International Agribusiness in China: Charoen Pokphand Group Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Cp 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 International Agribusiness in China: Charoen Pokphand Group - 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
– Cp Agribusiness is present in almost all the verticals within the industry. This has provided firm in International Agribusiness in China: Charoen Pokphand Group 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.
Operational resilience
– The operational resilience strategy in the International Agribusiness in China: Charoen Pokphand Group 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.
Strong track record of project management
– Cp Agribusiness is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Leadership & Managing People field
– Cp Agribusiness is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cp Agribusiness in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Cp 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 William C. Kirby, Michael Shih-ta Chen, Tracy Yuen Manty, Yi Kwan Chu 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.
Weaknesses International Agribusiness in China: Charoen Pokphand Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of International Agribusiness in China: Charoen Pokphand Group are -
Increasing silos among functional specialists
– The organizational structure of Cp Agribusiness is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Cp Agribusiness needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cp Agribusiness to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Cp 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cp 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.
Products dominated business model
– Even though Cp 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 - International Agribusiness in China: Charoen Pokphand Group should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Cp Agribusiness has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study International Agribusiness in China: Charoen Pokphand Group, it seems that the employees of Cp 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.
Slow decision making process
– As mentioned earlier in the report, Cp 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. Cp 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.
Need for greater diversity
– Cp 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.
Capital Spending Reduction
– Even during the low interest decade, Cp Agribusiness 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.
Aligning sales with marketing
– It come across in the case study International Agribusiness in China: Charoen Pokphand Group that the firm 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 in the case International Agribusiness in China: Charoen Pokphand Group can leverage the sales team experience to cultivate customer relationships as Cp Agribusiness is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Cp Agribusiness, firm in the HBR case study International Agribusiness in China: Charoen Pokphand Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities International Agribusiness in China: Charoen Pokphand Group | 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 International Agribusiness in China: Charoen Pokphand Group are -
Creating value in data economy
– The success of analytics program of Cp Agribusiness has opened avenues for new revenue streams for the organization in the industry. This can help Cp Agribusiness to build a more holistic ecosystem as suggested in the International Agribusiness in China: Charoen Pokphand Group case study. Cp Agribusiness can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Cp 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.
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. Cp Agribusiness can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Cp 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cp Agribusiness 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 Cp Agribusiness to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cp Agribusiness can use these opportunities to build new business models that can help the communities that Cp Agribusiness operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cp 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.
Leveraging digital technologies
– Cp 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.
Building a culture of innovation
– managers at Cp 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cp Agribusiness 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. Cp Agribusiness 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Cp Agribusiness can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Cp Agribusiness to increase its market reach. Cp Agribusiness 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.
Using analytics as competitive advantage
– Cp 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 International Agribusiness in China: Charoen Pokphand Group - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cp Agribusiness to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats International Agribusiness in China: Charoen Pokphand Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study International Agribusiness in China: Charoen Pokphand Group are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cp Agribusiness in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Cp 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 Cp Agribusiness.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cp Agribusiness with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Cp 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, Cp 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.
Shortening product life cycle
– it is one of the major threat that Cp Agribusiness is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 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. Cp Agribusiness 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, as highlighted in case study International Agribusiness in China: Charoen Pokphand Group, Cp 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 .
High dependence on third party suppliers
– Cp 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.
Stagnating economy with rate increase
– Cp 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.
Regulatory challenges
– Cp Agribusiness 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 Leadership & Managing People industry regulations.
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. Cp 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.
Consumer confidence and its impact on Cp Agribusiness 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 the industry and other sectors.
Weighted SWOT Analysis of International Agribusiness in China: Charoen Pokphand Group 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 International Agribusiness in China: Charoen Pokphand Group 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 International Agribusiness in China: Charoen Pokphand Group 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 International Agribusiness in China: Charoen Pokphand Group 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 International Agribusiness in China: Charoen Pokphand Group 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 Cp Agribusiness needs to make to build a sustainable competitive advantage.