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 - – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing commodity prices, increasing transportation and logistics costs, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
cloud computing is disrupting traditional business models, increasing energy prices, 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 -
Highly skilled collaborators
– Cp 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 International Agribusiness in China: Charoen Pokphand Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Cp 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.
Organizational Resilience of Cp Agribusiness
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cp Agribusiness does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Cp Agribusiness is one of the leading recruiters in the industry. Managers in the International Agribusiness in China: Charoen Pokphand Group are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Low bargaining power of suppliers
– Suppliers of Cp Agribusiness in the sector have low bargaining power. International Agribusiness in China: Charoen Pokphand Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cp Agribusiness to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Cp 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.
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.
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.
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.
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.
Innovation driven organization
– Cp Agribusiness is one of the most innovative firm in sector. Manager in International Agribusiness in China: Charoen Pokphand Group Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the International Agribusiness in China: Charoen Pokphand Group 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 Cp Agribusiness has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study International Agribusiness in China: Charoen Pokphand Group, in the dynamic environment Cp Agribusiness has struggled to respond to the nimble upstart competition. Cp Agribusiness has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, William C. Kirby, Michael Shih-ta Chen, Tracy Yuen Manty, Yi Kwan Chu suggests that, Cp Agribusiness is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study International Agribusiness in China: Charoen Pokphand Group, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
Slow to strategic competitive environment developments
– As International Agribusiness in China: Charoen Pokphand Group HBR case study mentions - Cp 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.
Lack of clear differentiation of Cp Agribusiness products
– To increase the profitability and margins on the products, Cp Agribusiness needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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 Cp Agribusiness in the consumer business. Now Cp 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. Cp Agribusiness can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cp 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, International Agribusiness in China: Charoen Pokphand Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
Manufacturing automation
– Cp Agribusiness can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
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 -
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.
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 .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cp Agribusiness in the Leadership & Managing People industry. The Leadership & Managing People 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.
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.
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.
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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cp 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 International Agribusiness in China: Charoen Pokphand Group .
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.
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.
